Aviva wrap allows up to 10 per cent commission
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Aviva is allowing advisers to take initial commission of up to 10 per cent on its newly relaunched wrap.
The firm’s literature says advisers can take initial commission of between 0 per cent and 10 per cent in 0.01 per cent increments on all of the client assets on the platform.
But head of wrap Nick Burton has defended the move, adding that advisers are responsible enough not to fleece the system.
He says: “The FSA makes it reasonably clear that a provider’s role is not necessarily to police the level of fees agreed between advisers and customers, that is a matter for them.
“Any responsible provider would be expected to manage that process at the extremes. But as a principle it is not the role of a provider to be a party to an agreement between an adviser and a customer.
Burton adds that the most common initial commission on our platform is 0 per cent.
He says: “If advisers move clients on to our wrap platform they may have already given advice and taken fees and therefore the most common commission we have is 0 per cent.
“I do not think advisers are irresponsible. I think they are responsible. What we are doing is giving them the flexibility to structure an agreement around fees with customers in a flexible way.”
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Readers' comments (2)
Ian | 29 Jan 2010 9:13 am
That is the way most of the RDR ready product works today, except I am not aware that there is an upper limit.
Few clients would agree to such a high commission unless they required a lot of worthwhile planning done elsewhere and wanted it all funded from a less valuable (to their planning) plan.
Bit of a sensationalist headline being banded about.
Is there any limit on any of the other major Wraps?
However anyone who was misguided enough to think that the RDR will bring lower cost to the consumer is very mistaken.
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John Blackmore | 29 Jan 2010 11:19 am
@ Ian lower cost to the consumer ? I agree - RDR will almost certainly result in much higher costs to those who seek advice. There is some hope for those who go direct but that is nother story.
Rather than commission bias we will have fee bias with advisers tempted into activity for its own sake - in order to justify higher fees.
Not long ago 0.5% trail was the norm.
Today 1% pa trail is not unusual. who knows how high some of these "fees" will go. Based upon the creative past performance of the Industry my guess is that much higher is the answer
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