Despite extensive lobbying by several life offices, little of the regulation has changed after the consultation and a number of providers have voiced their disappointment, particularly with the need for IFAs to disclose market-average commission levels.
Norwich Union director of distribution change Mick Johnson says the firm had lobbied against the rule due to concerns that it could result in IFAs declining to sell any products that pay commission significantly out of kilter with the market average, thereby reducing consumer choice.
Scottish Life group communications director Alasdair Buchanan says some providers may lose out if their commission structure makes the adviser appear expensive, for example, groups which pay out the majority of commission up front rather than over the life of a contract.
Buchanan says: “Advisers may find they are less inclined to use a particular company because of its commission structure.”
Both Scottish Widows and Standard Life welcome the move towards implementation after such a long lead time, with Widows saying it is bullish about the opportunities that multi-ties will offer.