The more that Clerical Medical tries to revive its profile in the IFA market, the more it seems to trip over its own shoelaces.
Hardly a week goes by without the appearance of a report on another Clerical Medical gaff which has upset some part or other of the IFA community, the latest one being a refusal to pay commission on personal pension business on a non-indemnity basis.
Like Chris Petrie, we took the decision a few years ago to leave behind the ups and downs of indemnity commission and the result has been a very healthy stabilisation of our cashflow. While we have only two bumper months a year (when our half-yearly fundbased trail commission is paid), we never have a lean month either.
Apart from all the other reasons, we would not consider Clerical Medical for pension business simply because they are so obviously out of touch with the way in which what must surely be a steadily increasing proportion of the IFA community would want to receive any regular-premium related commission.
Although not actually spelt out (does anyone know why?), one implic-ation of the RDR seems fairly clear, namely that the industry would be well advised to try to wean itself off indemnity commission as this must surely be a root cause of past misselling.
Should anyone from Canada Life International be reading this, we are equally annoyed with them as well for refusing to offer a non-indemnity commission option on their whole of life contract (and hardly impressed with our network’s failure to take up the issue with them on our behalf).
Legal & General, on the other hand, does offer a non-indemnity commission option but frequently seems to pay it on an indemnity basis even though you have specified non-indemnity. But with L&G that is pretty well par for the course, which is why we use them for absolutely nothing at all unless there really is no alternative. And so it goes…