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Clients&#39 unemployment &#39can lead to clawback&#39

IFAs who do not recommend unemployment cover risk losing significant amounts of commission to clawback, according to specialist insurer Goodfellows.

The firm interviewed 1,000 of its mortgage payment protection claimants who have been unemployed for longer than four months.

It found that 63 per cent of respondents have been forced to cancel or suspend contributions to their pensions and other financial services products due to financial hardship. This has led to commission being clawed back by product providers.

Unemployment income protection can cover up to 75 per cent of gross earnings for clients unemployed for a per-iod exceeding 30 days.

The insurer is recommending that all IFAs consider providing their clients with this type of protection to cover the costs of their pension payments and other financial products such as endowment policies.

Independent insurance specialist Berkeley Alexander managing partner Ted York says: “For some businesses, there could be as much as a 10 per cent lapse rate on products due to clients being made unemployed.”

Goodfellows managing director Simon Burgess says: “In addition to protecting against clawback, unemployment income protection can provide IFAs with a highly relevant discussion topic for clients and provides a useful springboard for the sale of other more lucrative products.”


Heath says IFAs need a new name

The phrase “independent financial adviser” may need to be changed to increase clarity among consumers, according to former IFA Association director general Garry Heath.Heath, director of Portfolio Members Services, says polarisation underpins the status of IFAs and if polarisation is scrapped, it could be time to redefine the territory to send a clear message to […]

C&G reduces savings rates

Cheltenham & Gloucester is reducing investment rates from May 1, 2001, with the interest rate on its cash Isa falling to 6 per cent from 6.45 per cent, and on its Tessa Isa from 6.45 per cent to 6.1 per cent.The C&G Direct Transfer telephone account will pay 5.2 per cent gross on the top […]

Threadneedle Pensions – Cautious Pathway

Wednesday, 2 May 2001.Type: Pooled pension fund.Aim: Growth by investing in bonds and equities.Minimum investment: Lump sum £1,000.Investment split: Property 4 per cent, overseas equities 25 per cent, UK equity 25 per cent, overseas bonds 16 per cent, UK bonds 30 per cent.Charges: Annual 0.35-0.85 per cent.Commission: None.Tel: 020 7464 5691.

5.69 per cent fixed loan deal among C&G offers

Cheltenham & Gloucester, the UK&#39s third-biggest lender, is setting up a new range of fixed-rate mortgages.The loans offer rates of between 5.39 per cent and 6.09 per cent, depending on the size of the loan and the duration of fixed-rate period which are from two to five years. Early repayment charges will be restricted to […]


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