The deal with IFS
THE UNION has signed up with IFS in order to offer members access to financial services on good terms, including offering a stakeholder pension. Employers with more than five staff are obliged to set up a stakeholder pension and the union believes it will be a useful addition to collective bargaining to be able to say to employers that the union has its own scheme.
The company is offering pensions, tax-free savings, mortgages, life insurance, critical illness cover, financial planning and other financial products. It is a good deal for the union, which will get 10% of the commission IFS receives for selling financial products to NUJ members. In return, the union will be publicising IFS to members.
Members will get a refund of 25% of the commission IFS receives on any financial products they buy after getting financial advice from IFS. If you already know what you want and don't ask for advice (what is known in the trade rather ominously as "execution only"), IFS will give back 50% of the commission. The rebates will come as a cheque from the union. There is no rebate on the union's stakeholder pension, which is being provided by Norwich Union. IFS gets only minimal commission and the annual management charge is 0.85% of what you pay in, falling to 0.45% as an individual's fund builds up.
At the LFB meeting a member pointed out that through the internet you can buy with 100% commission rebate. Nic Cicutti suggests that if you are certain about what you want to get then it makes sense to do it through an internet company. But if you aren't confident that you know what you need, it is worth getting advice before buying, which is where IFS comes in.
Choosing to recommend an independent financial adviser is obviously hazardous. The NUJ sub-committee that picked IFS, which included Nic Cicutti and another financial journalist, hopes it has made a good choice. IFS works among others for the bankers' union Unifi, which was seen as a good recommendation. The company wants a long-term relationship with the union, and is unlikely to be pushing unsuitable products on people. Peter Duffy said: "We offer genuine, independent financial advice. We don't look at the commission levels before giving you advice."
But the quality of IFS' advice is not something the union can guarantee. And, as the small print says, investments can go down in value as well as up.
Contact IFS on their website www.ifsgroup.co.uk/nuj or on 01453 755195.