IFA says Skandia not passing on commission
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Apogee Financial Planning IFA Simon Ainscough has hit out at Skandia for retaining commission when it passes clients on to Legal & General for annuity purchase.
Skandia, which does not offer its own annuities, arranged a tie-up deal with Legal & General in 2006 for clients who do not choose the open market option. It receives 2 per cent commission for these referrals, which it does not pass on to intermediaries.
Ainscough says it was not economical for his client to exercise OMO due to the pension fund size as his fee for advice would have outweighed the benefits. However, Ainscough feels he is owed the commission as he introduced the business.
He says: “I do not think anyone could have provided advice because it was only a small fund. It was not economical, so the client has gone with L&G directly via Skandia. Some of the more traditional companies are more supportive of IFAs, whereas here Skandia has not been.”
Skandia says if Ainscough had given advice and made the recommendation on the open market, then he would be due commission from whichever scheme he recommended.
A spokesman says: “We offer the L&G default option as part of our treating customers fairly requirements but only where advice is not provided.”
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Readers' comments (2)
Michael Fallas | 6 May 2010 10:14 am
If no advice was given then what work was done to warrant the commission?
Equally as Skandia also did "not" give advice it is a bit hypocritial to tell the adviser if he had given advice then he would have been paid commission but Skandia takes the commission anyway.
Was L & G the best option as in my view if Skandia took commission they should then make sure it was the best deal for the client otherwise what are they being paid for?
If they want to offer a service under TCF then why not just offer L & G but give the commission back to the client in an enhanced annuity ?
If the FSA says renewal commission cannot be passed on when a client changes IFA then should the same rules not apply here as in effect Skandia has become the new adviser and has been accordingly paid for it?
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Richard Price | 6 May 2010 11:54 am
It's not fair that Skandia get paid commission for doing nothing. The adviser should get paid the commission for doing nothing.
Shouldn't Skandia be registered as an AR of L&G?
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