Life offices in row over GPP commission promotions
Share
Royal London has slammed Scottish Widows and Aviva for sending leaflets to advisers advertising the fact that they will continue paying commission on existing group pension business after the retail distribution review.
In its recent policy statement - Delivering the Retail Distribution Review - Corporate Pensions - the FSA confirmed that commission could continue on GPP business but warned product providers that it would be monitoring the market for closing-down sales.
Speaking to Money Marketing, FSA head of investment policy Peter Smith says: “If we thought that any marketing was leading to a series of bad outcomes for the employees who are members of the schemes, we would be discussing that with both the providers and the advisers and seeing what we thought was the appropriate action to take.”
Royal London chief executive John Deane criticises the promotional drive by Widows and Aviva. He says: “These statements are looking backward rather than forward because they are all about the old provider and adviser relationship.
“The way for advisers to get certainty over remuneration is to have contracted terms with the employer where the employee understands what is being deducted from the policies rather than making statements assuring commissions, which do not reflect the charges payable by theendcustomer.”
But Scottish Widows intermediaries director Simon Massey says the aim of the leaflets is to support advisers in their transition to new business models for the RDR.
He says: “Giving them clarity on our commission stance is vital in helping them make the right transition plans.”
Aviva director of pensions and savings Brian Bussell says: “This initiative is intended to reassure advisers of our continued, unch-anged commitment to the GPP market. It is fully consistent with the FSA policy statement.”
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
