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Chadborn wants remuneration rethink for protection business

New remuneration options are needed in the protection market to encourage more IFAs to advise in this area, says CBK principal Peter Chadborn.

Chadborn says big up-front fees are outdated and potentially crippling to firms if some of the money needs to be clawed back. He says moving to trail for protection is a better route but suggests the industry needs to think of a new way to remunerate advisers.

He says: “The rest of the industry in terms of wealth management and investment is about avoiding up-front commission, providing an ongoing service and getting recurring income. The financial pain of moving from indemnity to non-indemnity is too much for many IFA models to bear, so can there not be a third way?”

Bright Grey managing director Roger Edwards says there are other options such as switching from commission to a procuration fee.

Legal & General IFA sales director Martin Noone suggests the industry could offer a smaller lump sum to be paid alongside trail commission.

Noone says: “We have got no plans to change our commission structure but we support the IFA community and if there is a big enough call to change or increase the options on commission payments, we are flexible.”

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