It just depends on what their business strategy is. Are they in the business for the long term or do they just want to cherry-pick. Latter, to me, is a short-term strategy.
If the value goes above €100,000, the price of the Standard Life contract goes down by 0.5%, that is the long term strategy. Many of the self directed PRSA providers have tiered pricing structures based on AUM.
It is a calculated risk by RL to offer such low amc for all contracts. It benefits consumers alright, not sure how it will work out for RL in the long term.
These insurers are required by regulation to hold capital to ensure they can administer their contracts out to the policyholders retirement date in loads of different severe scenarios. That capital has to be raised on equity markets where shareholders expect double digit returns and then tied up over long periods in cash type assets that earn negligible return. In other words, for an insurer, it's not just sell a contract and bank the charges immediately.
This may help to explain some market trends. Regulation brings benefits, but at a cost.