Axa revealed last week that it is set to withdraw initial commission from its corporate pension products.
The firm says the move is part of a strategic goal to align itself with the proposals of the retail distribution review. It says it has focused on bigger employers and their consultants, many of which work on a fee basis.
Distribution and marketing director for corporate pensions Nick Groom says: “This articulates our desire to offer a clean and transparent corporate pension proposition to our important distribution partners on behalf of their blue-chip clients.”
But NU believes that despite personal accounts and the RDR, the initial commission market can still be as profitable as the fee-based market.
Head of pensions marketing Paul Goodwin says: “We remain supportive of initial commission for GPPs where it suits an adviser’s business model and meets our profit targets.
“We recognise that the corporate pension landscape is rapidly changing but we believe that the initial commission market is as profitable as the fee-based market.”
Kohn Cougar managing director Roddy Kohn says: “What on earth is Axa doing? When you consider that most companies are in financial dire straits at the moment, they are going to be hard pressed to find fees to pay their IFA.
“I think this is more about Axa supporting its own balance sheet, which is understandable but it flies in the face of being IFA-friendly.”