Scottish Widows call to delay legacy commission ban
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Scottish Widows is calling for the ban on legacy commission to be delayed until January 1, 2014, possibly aligning it to the introduction of the new platform rules.
The FSA is set to publish guidance consultation on legacy business later this month.
In March, the regulator wrote to trade bodies to clarify that legacy commission will be banned under the RDR although trail commission can continue.
The FSA is also yet to clarify its position on platforms. In its policy statement last month, it said it is “desirable” to ban both cash rebates and payments to platforms but it needs to conduct further research on the implications for consumers. It added that any rules on payments will not come in until after January 1, 2013.
Scottish Widows head of distribution development Robert Kerr says: “There is an argument for bringing in the RDR for new business at the original deadline of January 1, 2013 but leaving the legacy bit until a year later.”
The Association of British Insurers wrote to the FSA earlier this week to push for a delay on the legacy commission ban.
ABI director of life and savings Maggie Craig says: “We cannot change the rules at a moment’s notice without customers suffering disadvantage so we are asking the FSA for more time.”
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