An adviser has hit out at Axa Wealth for contacting his client directly with a quote for a Legal & General annuity and offering to share the 2.5 per cent commission with the adviser if the client buys the plan.
On November 24, Axa Wealth sent a wake-up pack to IFG consultant Nigel Stratton’s client, who has a £434,000 pension fund. The letter, seen by Money Marketing, says L&G is Axa’s annuity partner and a comparison of the two providers shows L&G would offer a higher income. It adds that the client should shop around.
On the same day, Axa Wealth wrote to Stratton saying it will share the 2.5 per cent commission if the client buys the annuity after taking advice.
The letter says: “The L&G illustration takes into account the total commission payable. This assumes a total payment of 2.5 per cent of the purchase price which is payable to Axa Wealth Limited and yourselves.
“Should this quote be accepted and your client indicates that your firm has provided advice with respect to the application, L&G will share the commission between you and Axa Wealth.”
Stratton says: “It is extremely annoying that Axa has contacted my client and recommended a product when it does not know the client. Then it has the gall to say it will share the commission, which is high. I would expect it to be 1.5 per cent at the most.”
An Axa spokesman says the firm did not make a recommendation to the client but rather highlighted a quote from its preferred provider in accordance with best practice, which included telling the client to shop around. He says the 2.5 per cent commission offered to Axa by L&G has no bearing on the annuity rate offered to the client. The spokesman says: ‘We have followed correct procedures, in particular in regard to the OMO and duty of care to our clients.”