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Aifa and LIA row grows in commission bias claim

The LIA has accused Aifa of holding its hands up and admitting to the existence of commission bias in its cost-benefit analysis produced for its menu-based system for remunerating IFAs.

In a clear escalation of the row between the adviser bodies, the LIA says Aifa is advocating the removal of commission as part of its alternative remuneration proposals.

Aifa rejects the LIA&#39s claim, saying that it has never called for the removal of commission or admitted to commission bias among advisers.

In the cost-benefit analysis, which was compiled by consultancy Charles River Associates, it is claimed that £95m a year will be saved by the introduction of Aifa&#39s proposals.

The LIA argues that this saving appears to come from removing commission and product bias among advisers.

In a letter to Money Marketing, LIA director of public affairs John Ellis says: “It is interesting that an eventual saving of £95m seems to be related to the abolition of commission. Is this a suggestion that IFA recommendations to clients are currently biased? It looks like it to me.”

Aifa director of policy and technical services Fay Goddard says: “I think that he has misinterpreted the cost-benefit analysis. Certainly we have never called for the abolition of commission. We think that IFAs should be allowed to operate on a commission basis if that is what their clients want.”

•Letters, p26


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Civil Service appoints DC providers

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Guide: reporting to the Pensions Regulator — what and when?

Johnson Fleming has published a step-by-step guide demonstrating the importance of record keeping and reporting, and how it can ensure you operate a successful scheme. The guide takes you through some key questions you need to ask and identifies the information you need to obtain. The topics include: why you need to keep records and the benefits of doing this; registering your scheme; what information you need to record to ensure you meet the Pensions Regulator’s requirements; and what items need to be recorded and when.


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