The Financial Services Authority (FSA) has announced that it will be banning commission on all new Group Personal Pension (GPP) products and sales, whether sold with advice or otherwise, from the end of 2012, in line with other Retail Distribution Review (RDR) requirements.

The new paper reports on feedback the regulatory body received on its publication CP09/31, and includes final rules.

CP09/31 consulted on applying the principles of Adviser Charging to group personal pensions, group stakeholders pensions and group self-invested personal pension (GPP) markets.

The FSA also ruled that it will allow commission to continue on GPPs that were established before the ban on commission is implemented, and will monitor the market until 2013 to ensure that no one takes advantage of this decision.

The ban on commission will be extended so product providers do not pay commission on investment products that are linked to occupational pension schemes and sold as GPP alternatives, and will allow ‘consultancy charging’ from GPP contributions and/or members’ accounts on a pound-for-pound basis.

The FSA also said it will enforce new rules to ensure that advisers disclose the full adviser remuneration to their employer’s clients, and will confirm that the ban on factoring for individual investments – including personal pensions – extends to adviser remuneration under GPPs.

Finally, the FSA will set up an industry-wide working group to look at the allocation of consultancy charges across different types of GPP members.

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