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&#39Multi-ties will spark hike in commission&#39

IFAs believe they would get commission rates of as much of 200 per cent of Lautro rates if they multi-tied compared with the current average of 140 per cent.

Sway financial services consultancy asked IFAs what commission they would expect under this structure. From the 800 respondents, the average emerged as between 150 per cent and 160 per cent but some firms estimated 200 per cent.

IFAs say they would expect commission to increase as providers would be trying to entice them to tie by offering better deals than competitors as a financial incentive.

They think this would be a way for providers to win over IFAs to increase their market share.

But some advisers say they would be reluctant to multi-tie even if they would increase their commission as it would not necessarily benefit consumers.

Baranworth Investments director Colin Jackson says: “Providers might increase commission as they would try and tempt IFAs to tie with them.”

IFA Halton Insurance Service director Mike Fry says: “Some providers might give more commission to get a bigger market share but I don&#39t like the idea of multi-ties.”

Sway marketing director Gina Marlowe says: “This was the commission estimate IFAs gave when asked but we did not go into the reasons behind the responses.”

Scottish Equitable spokes-man Scott White says: “Commission rates will be driven by market forces and will find a level appropriate to the advice being given.

“There is a debate over whether too much commission is being paid and providers which do so will not cut the ice in the future world.”


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