Standard Life argues that customer-agreed remuneration would negate the role of “commission club” regulated networks.
Distribution strategy director Stephen Ingledew says for advisers wanting to be remunerated by CAR and call themselves independent, the attraction of a network is not so obvious.
He says: “In order to call yourself independent, you need to adopt CAR. One of the selling points of the network is that they can get better commission rates than going direct. With CAR calling for greater transparency over commission levels, it calls into question that mechanic.”
Ingledew believes it might drive more IFAs towards service propositions where fees are paid for compliance and marketing support.
He says: “I know some support propositions also benefit from better commission but they are more about how the advisers are paid. Many tend to charge fees for their serv- ices, which is more straight- forward if firms want to declare themselves independent.”
But network chiefs think his views are outmoded, saying that commission levels are rarely a factor in ARs choosing a network.
Tenet chief executive Simon Hudson says : “I find this view a little outdated. Support service propositions would not exist if it were not for the fact they could get better commission rates. If you asked our network members why they had gone down that route I think you would find commission is far down the list of reasons.”
Whitechurch Network managing director Ian McIver says: “We so rarely get asked for commission rates we do not even have documents outlining what our rates are.
“What network members want help with is compliance, TCF, RMAR – they want protection from doing it wrong.”