I was absolutely fascinated by the letter from the “non-churning IFA”. It seems to me to be thoroughly unethical for so-called IFAs to take large chunks of commission on policies which are then going to be converted without penalty. In any event, I think it is obscene to take 5 per cent commission on the drawdown case plus, as many well-known firms do, a fee and trail as well.
As for the client urged to switch his SSAS, then the IFA paying half the £65,000 in commission to the client, that is illegal under Inland Revenue regulations as no commission generated from pensions is allowed to be repaid to a client under any circumstances, either with tax taken off or not.
What are these people thinking of? For those sort of sums, I would have thought that was the kind of offence that would warrant free board and and lodging at Her Majesty's expense, preferably a very long time so the rest of us who act in an honest way can continue our businesses without taint. These sort of people also add to our very high PI premiums.
BGW Jamieson Jamieson Financial Management, Bognor Regis, West Sussex