The RDR will ban commission on new business but providers can continue paying commission on contributions for new entrants and increments to existing schemes.
In an interview with Money Marketing, Matthews says: “The companies still paying commission think it is good from a marketing point of view. It will be interesting to see whether, come 2012, those firms continue to pay commission on existing business or not.
“Whatever they say, I am sure they do not like paying commission. They know the numbers as well as we do and the numbers do not make sense. It is just suicide as far as I can see.”
Aviva has confirmed it has no plans to stop paying commission after the RDR and has slammed Friends for attacking the commission-based market after being an active member of the sector before the firm’s strategic review in 2008.
Head of pensions Paul Goodwin says: “It is strange Friends Provident, which up until quite recently was one of the highest-paying commission players in the market, is now all of a sudden saying yesterday it was good but today it is bad.
“We fully intend to continue to pay commission for schemes written prior to the RDR. Why would we not? It is a market we are comfortable with and we think it is profitable.”
Scottish Widows says it has no plans to remove commission on existing schemes from 2012 while Aegon has only committed to paying commission until the RDR is implemented.