View more on these topics

Competition Act warning on commission

Networks and national IFAs which use their financial muscle to gain better deals from life offices could fall foul of the new Competition Act, warn legal experts.

The higher rates of commission paid by providers to big networks and national firms compared with smaller IFAs could be open to challenge under the act, says specialist firm Compliance Consultants and lawyers Armstrong Neil.

City lawyers believe smaller IFAs may have grounds to sue providers under the act.

They believe common practices such as offering exclusive deals or best-advice panels could be uncompetitive under the act.

The experts claim big IFAs demanding and often getting higher rates of commission from a provider because it forms part of a panel could be seen as violating the spirit of the new law. This would be especially true if a smaller IFA firm could not get access to the same commission rates for selling the same product.

LIA spokesman John Ellis says that, while the act does not specifically spell out a situation where this might occur, it could be broadly interpreted to have implications for IFAs.

Armstrong Neil partner Gareth Fatchett says: “Within the act, networks and insurance companies could be affected because of exclusive deals and best-advice panels.”

Compliance Consultants managing director Simon Collins says: “It will not affect everyone but certainly it could affect bigger firms.”

Recommended

Aegon still looking for buys as profits double

Scottish Equitable parent company Aegon UK says it is still on the hunt for further acquisitions after record new business results for the first half of this year.The group says following the successful acquisition and integration of Guardian life and pension business, which it bought from Axa last year, it is still “interested in selected […]

Causes for complaint

How do you account for the continuous rise in the number of complaints that you are dealing with?These days, people have higher expectations of the way business is done and stand-ards themselves have risen.In addition, every now and again, something happens, such as the endowment letters currently going out, which has significantly increased the number […]

National Savings investment reaches £62.6bn

Gross investment in National Savings’ products increased £931m in June 2000. Savings have now reached £2.6bn this year in its range of income bonds. The Government body says it has attracted £62.7bn in investment in total.

Britannia and Yorkshire to share branches

Britannia and Yorkshire building societies, the second and third largest societies in the UK once Bradford & Bingley converts, have agreed to share each other’s branches. From early next year, customers of the two societies will be able to pay into or withdraw from mortgage and savings accounts, free of charge, in 322 branches across […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment