Aviva Self Invested Personal Pension

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1 For financial advisers only. Not approved for use with clients. Aviva Self Invested Personal Pension Charges and investment limits summary for financial advisers The information contained within this document is correct as at February It provides a summary of charges and limits that apply to the Aviva SIPP when clients make a top-up to their account. Bear in mind, though, that charges, limits and commission terms may vary. You can find the latest versions on our website at aviva.co.uk/sipp. If we make any changes to these charges or limits and it impacts your client we ll tell you about them in advance. This leaflet also explains what charge and commission options the Aviva Self Invested Personal Pension (SIPP) offers you, and the effect they can have. Please use this leaflet as a guide when you complete the financial adviser section on your client s Aviva SIPP online application. It s up to you to agree your remuneration and method of payment with your client. Flexibility The Aviva SIPP offers you flexible charge and commission choices designed to meet your needs and those of your clients, now and in the future. Here are just some of the advantages of choosing Aviva: You can keep your investment advice separate from your remuneration decision, because the advice charge you receive isn t normally dependent on the investments your client chooses. Funded commission and payment-linked advice charges are based on payments into the SIPP, regardless of where they re invested (except for commercial property transferred into the SIPP). Please note that funded commission is not available to clients who applied for the Aviva SIPP after 30 November The fund-based advice charge is based on the total value of investments, excluding direct commercial property and equity investments. You can be remunerated at key advice stages. You can choose the advice charge type that best meets your and your client s needs: your advice can be paid for by monthly deductions from the plan, by an up-front charge (if your client applied for the Aviva SIPP no later than 30 November 2012), or by a mixture of both. You can choose different amounts of funded commission and payment-linked advice charge for each single transfer payment (subject to the date your client applied for the Aviva SIPP). Choice There are four types of advice charge available: Fund-based advice charge Paid from the plan. Payment-linked advice charge Paid for by an initial charge. Funded commission Up-front commission. A commission account is set up for each plan, which is paid off monthly by a deduction from your client s plan. Funded commission is not available to clients who applied for the Aviva SIPP after 30 November Drawdown initial charge A charge that you can include when setting up income drawdown. Availability Fund-based advice charge can be chosen: at the start of the plan, if your client applied for the Aviva SIPP no later than 30 November Payment-linked advice charge and funded commission may be available when: a single or transfer payment is made regular payments start some or all of the fund is used to provide benefits a drawdown crystallisation is undertaken. You can choose the different types of advice charge in any combination. Turn overleaf to find details of each type, any restrictions and their effect on charges.

2 Types of advice charge available Fund-based advice charge Amount available Up to 1.00% a year of the total plan value (excluding direct commercial property and equity investments), in 0.01% steps. We pay fund-based advice charge monthly. The same rate will apply to both the crystallised and uncrystallised funds. Effect on charges Fund-based advice charge is taken monthly from your client s plan on a like-for-like basis. Payment-linked advice charge Amount available Up to 5.00% of each single or regular payment in 0.01% steps. No uplift is available. We pay a payment-linked advice charge for regular payments at the same frequency as the regular payments. The level chosen at outset for regular payments cannot be increased. The same level will apply to all future regular payments and increases. If you choose payment-linked advice charge and funded commission, the maximum total for single or transfer payments is 7.00%. Effect on charges We will make a charge on each payment on a like-for-like basis. Funded commission Amount available Single and transfer payments Up to 4.00% of the single payment, in 0.1% steps, depending on your client s age (as shown in the table on the next page). Regular payments A one-off payment up to 12.00% of the yearly payment, in 0.3% steps, depending on your client s age (as shown in the table on the next page). You can only take funded commission when regular payments start. It isn t available on increases. Your client s payments must be between 500 and 2,000 a month for you to qualify for funded commission. Funded commission is not available if your client is aged 70 or over, or applied for the Aviva SIPP after 30 November If you choose funded commission and payment-linked advice charge, the maximum total for single or transfer payments is 7.00%. Effect on charges We ll deduct a yearly charge for funded commission until the amount taken has paid off the commission account, or for six years from the last payment of funded commission, whichever period is shorter. The amount is a percentage of the total plan value as shown in the table overleaf. We take the charge from the plan monthly, in addition to other charges. The yearly charge for funded commission applies to the whole plan, except for direct commercial property and equity investments. If a subsequent payment is made at a lower level of commission, the percentage of yearly charge remains the same. If a higher level of commission is chosen, the charge will increase accordingly. The amount of funded commission we pay when funds are used for pension fund withdrawal is limited to the maximum age related single payment funded commission, minus the amount still in the commission account. Your client can choose a higher yearly charge for funded commission to pay off the commission account sooner. Your client must pay off the commission account immediately if they use any funds to buy commercial property, or if they take a tax-free cash lump sum when commercial property is held in the plan. Funded commission is not available on phased drawdown.

3 Funded commission (continued) Yearly charge for funded commission as % of the plan value, excluding direct property and equity investments Single / transfer payments % of payment Regular payments % of yearly payment under under % Nil Nil Nil Nil 0.25% 1.00% 3.00% 0.50% 2.00% 1.00% 6.00% 3.00% 0.75% 3.00% 2.00% 9.00% 6.00% 1.00% 4.00% 3.00% 12.00% 9.00% Funded commission is not available if your client is aged 70 or over, or if your client applied for the Aviva SIPP after 30 November Drawdown initial charge A specified charge that can be entered by the adviser when setting income drawdown. Effect on charges We will make a charge on each payment on a like-for-like basis. Commission claw-back We may claw back funded commission when: regular payments stop or reduce funds are transferred out. We won t claw back commission on any tax-free cash lump sum your client takes, nor on your client s death. The amount we claw back will reduce the amount left in your commission account. You can see more details below. When regular payments stop or reduce We will claw back funded commission if regular payments stop or reduce within the first three years, regardless of the amount in your funded commission account. The amount we claw back will be the amount of unearned funded commission. Anything above the amount outstanding in the funded commission account will be credited to your client s cash account. Example one Regular payment: 1,000 a month. Funded commission paid: 1,440. Payments stopped after five months. Claw-back: 1,440 (5/36 x 1,440) = 1,240 When funds are transferred out We will claw back funded commission if funds are transferred out in full or part: before the funded commission account has been paid off within six years from the last payment of funded commission. This includes: using funds to buy an income for life. transferring funds during pension fund withdrawal. We base the amount we claw back on the proportion of the fund being transferred. Pension fund withdrawals up to the maximum permitted level will not be subject to claw-back. Example two using funds to buy a pension. Fund value: 75,000 Amount used for pension: 15,000 Outstanding cost of advice: 1,250 Claw-back: 15,000 / 75,000 x 1,250 = 250 Example three transferring funds which are being used for pension fund withdrawal. Fund value: 75,000 Amount to be transferred: 15,000 Maximum pension fund withdrawal: 7,500 Outstanding cost of advice: 1,250 Claw-back: (15,000-7,500) / (75,000-7,500) x 1,250 = Change of adviser If a client changes their adviser, funded commission will not be available to them.

4 Charges The following charges may apply, depending on the investments your clients choose and the advice charge basis you select. Bear in mind that your client may need to pay additional charges on top of ours. They will have to pay any transaction fees associated with buying and selling shares. And some fund managers, insurers or custodians may charge them for re-registering assets. Aviva charge 0.55% a year of the total plan value, excluding direct commercial property and equity investments. Deducted monthly from the cash account. Fund management charge The charges vary from fund to fund. Some may also include an initial charge. Full details of fund managers charges are available from our website: aviva.co.uk/sipp. Any other transaction-related costs may be passed on to your client. Fund manager ongoing charge Fund managers will also take charges that will depend on the investments chosen. These charges will be expressed as the ongoing charge figure (OCF) or total expense ratio (TER). These cover the charge made by the fund manager for managing the investment as well as expenses incurred by the fund. Please note the OCF and TER are variable and may change over time. Ongoing charges figure (OCF) The OCF is levied if your client is invested in UCITS investment funds, a type of collective investment. The OCF includes the annual fund management charge and the additional fund manager charge. Total expense ratio (TER) The TER represents the annual fund management charge and additional fund manager charge and is applied to non-ucits investment funds. Your clients will never pay an OCF and a TER charge for the same investment fund. These charges are not paid directly by investors, but are reflected in the fund s published price. Payment-linked advice charge We charge for the payment-linked advice charge paid on a like-for-like basis. It is deducted from the cash account when each payment is made. It is taken when you agree payment-linked advice charge with your client. See the payment-linked advice charge section for details. Yearly charge for funded commission It is up to 1.00% a year of the total plan value, excluding direct commercial property and equity investments. Your client can choose a higher charge to pay off the funded commission account sooner. It is deducted monthly from the cash account. Taken when funded commission is chosen. See the funded commission section for details (page 2). Fund-based advice charge It is up to 1.00% a year of the total plan value, excluding direct commercial property and equity investments. It is deducted monthly from the cash account on a like-for-like basis. It is taken when you choose fund-based advice charge. See the fund-based advice charge section for details (page 2). Drawdown initial charge It is a charge agreed between you and your client when setting up the income drawdown arrangement It is deducted from the cash account on a like-for-like basis It is taken when you choose drawdown initial charge option. See the drawdown initial charge section for details. Aviva charge discount The Aviva charge is reduced depending on the total plan value (excluding direct commercial property and equity investments), as follows: Total fund value Yearly discount % 50,000-99, , , , , ,000 and over 0.20 For example, if the total fund value is 250,000 the charge will reduce from 0.55% to 0.40% a year. We calculate the discount monthly. Structured product charges For Structured Products the provider may take charges from the amount we invest on your behalf. Please see the Structured Product provider s guide for details. These charges will not impact the return described in the guide. The value of the structured product is subject to the Aviva charge. Commercial property investments Commercial property investments are administered by Suffolk Life. We will deduct the following charges: an initial administration charge: 375. an annual administration charge: 0.12% of the net value, taken monthly. The net value is the value of the commercial property and cash held by Suffolk Life, minus any mortgage. In addition to our charges, Suffolk Life will make additional charges related to buying, selling and owning commercial property. Details of Suffolk Life charges are available from the Library section of the Aviva SIPP platform.

5 Equity charges Dealing charges are in three tiers, based on the size of the deal: Up to 15,000 Flat dealing charge of 25 15,001 to 29,999 Flat dealing charge of 35 Above 30,000 Flat dealing charge of 50 The minimum transaction value for each Investment is 50 including charges. Your client will be charged 10 an item for transferring shares in or out. Your client will be charged 1 extra for any order (or single batch of orders) worth more than 10,000. Your client will also have to pay any stamp duty or London Stock Exchange charges. Aviva SIPP limits Transfer charges We won t charge your client anything for transferring in investments from another pension provider. Transfer out charge While we won t charge your client anything for transferring out, bear in mind that some fund managers may charge them (for example, for re-registration). Charges for excessive transaction levels If we consider the number of linked sell and buy transactions and rebalancing of your client s portfolios to be excessive in any 12 month period, we reserve the right to charge them. Any charge would proportionately reflect the additional administration costs we suffer. We will always tell you in advance if we need to apply this charge. Pre Retirement Post Retirement Minimum account balance No minimum No minimum Minimum initial transfer in (if minimum account balance reached) Minimum initial transfer in (if no other money in plan) 10, ,000 10,000 Initial payment to income drawdown (single) Initial contribution to income drawdown (phased) Subsequent contribution to income drawdown (single and phased) Maximum initial payment or transfer Minimum regular payments No minimum initial crystallisation. No minimum Subject to Her Majesty s Revenue and Customs (HMRC) limits 300 a month or 3,600 a year If your client is starting regular payments into an existing plan already worth 50,000 or more, the minimum payments are 100 a month or 1,200 a year. No maximum Maximum regular payments Subject to HMRC limits Minimum additional single payment 1,000 Maximum additional single payment Subject to HMRC limits For Structured Products limits please see the product provider s literature.

6 Glossary Aviva means any of the companies in the Aviva Group that may provide services to your clients Aviva SIPP including: Aviva Pension Trustees UK Limited Aviva Life & Pensions UK Limited or any third party appointed by any one of them to supply services under this contract. Annuity Commercial Property Payment Crystallisation and Benefit Crystallisation Crystallised Equities Fund HMRC In specie transfer Investment Income Drawdown Lifetime Annuity Member Pension Commencement Lump Sum Post Retirement Pre Retirement Re-registration Scheme see Lifetime Annuity. means any permitted interest in land. means the amount paid into your client s SIPP and includes, as appropriate, single lump sum payments, regular payments, employer payments, transfer payments (including in specie transfers) from other product providers made into your client s SIPP. All payments made by cheque, debit card and direct debit must be made in Sterling. is the term used to describe the nomination to take benefits from your clients pension. means the part(s) of your client s SIPP where the benefits have been taken, either by taking a tax-free cash lump sum, drawing an income or by purchasing lifetime annuity. means an interest in a company in the form of shares. means a Financial Conduct Authority authorised or recognised unit trust or OEIC or other collective investment scheme in which units or shares can be purchased. means Her Majesty s Revenue & Customs. means the transfer of an investment other than cash from one pension plan to another. means any assets held within your client s Aviva SIPP. means assets which have been Crystallised. means a policy issued by an insurance company which provides a guaranteed income for life in exchange for a lump sum (which could be all or part of a client s accumulated SIPP). means a member of the Aviva Personal Pension Scheme. means the tax-free cash lump sum paid to a member of a pension scheme when their benefits come into payment. covers those investments which have been crystallised. covers those investments which have not been crystallised. where investments already held, either directly or under another pension plan, are moved to or from the Aviva SIPP without being sold and re-purchased. Also known as in specie transfers. means the Aviva Personal Pension Scheme.

7 Glossary (continued) Self Invested Personal Pension (SIPP) Structured Products Suffolk Life Tax-Free Cash (TFC) is a specific type of personal pension which offers your clients a wide choice of assets in which to invest, as opposed to just a selection of funds. SIPPs typically allow the customer or their nominated representative to take full control of the underlying assets, or to appoint an authorised fund manager to do this on their behalf. The portfolio may include a range of collective investments from different managers, and may include individual share holdings and commercial property. is a collective term for both Structured Investment Products and Structured Deposits. These involve either investing or depositing money for a fixed period in order to achieve a return which may be linked to the performance of a stock market index or other asset(s). is the commercial property specialist who holds commercial property on behalf of investors in that element of the SIPP. means tax-free cash lump sum paid to a member of a pension scheme when their benefits come into payment. This is also known as the Pension Commencement Lump Sum. Uncrystallised means the part of your SIPP where benefits are available and have not yet been taken. Drawdown Pension means your client can draw retirement benefits from age 55. Us/We/Our means any of the companies in the Aviva Group that may provide services to your clients Aviva SIPP including: Aviva Pension Trustees UK Limited Aviva Life & Pensions UK Limited

8 Retirement Investments Insurance Health Aviva Life Services UK Limited. Registered in England No Wellington Row, York, YO90 1WR. Authorised and regulated by the Financial Conduct Authority. Firm Reference Number aviva.co.uk SP /2016 Aviva plc