View more on these topics

Clerical error over non-indemnity

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…

Julian Stevens
Partner
Harvest IFM
Bristol

Recommended

Thames goes boutique shopping

Thames River has unveiled the details of Gary Potter and Robert Burdett’s five multi-manager funds.The range features equity managed, balanced managed, cautious managed, distribution and global boutiques funds. Global boutiques will aim to emulate the constellation fund that the pair ran at Credit Suisse, It will invest only in specialist fund houses and investment boutiques.The […]

A2O wants commission to stay as profits leap 40%

Profits have soared by 40 per cent for IFA network Alpha to Omega.The Winchester firm says profits rose to 732,000 for the year ending March 31 from 520,000 last year. Turnover increased by 7 per cent to 10.6m from 8.1m.The network has 42 member firms and is in its fourth year of trading. Chief executive […]

Protection price cuts set to peter out after impetus from cash boost

The recent spate of price cuts in the protection industry is due to a technical issue and will “fizzle out” in the next couple of months, claims Legal & General.The firm’s protection marketing director Alan Ferguson says that the extra margins which have been available to product providers since the FSA relaxed solvency requirements in […]

Bulldog spirit

Henderson Rowe dogs of the FTSETM 100 fund manager Giles Rowe overcame a flying phobia and an extreme fear of heights to raise money for children’s charity Fly2Help.Rowe took to the cockpit of a Bulldog aerobatic plane for a day of aerial rolls, loop the loops and simulated dogfights at 10,000 feet over Kemble in […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment