Halifax General Insurance has pledged to continue to pay trail commission on home insurance or accident, sickness and unemployment insurance policies.
It follows the decision of HBOS’s former subsidiary Paymentshield, which was sold to Towergate at the end of last year, to stop paying trail commission to brokers that are no longer regulated to sell such cover by the FSA.
However, an unnamed source questions whether HBOS is partly to blame for Paymentshield’s current poor image among brokers given it was the majority shareholder at the time of the controversial decision.
Halifax GI head of mortgage intermediaries Jon Craven says: “We believe that paying trail commission helps brokers by supporting the long-term growth of their business.
“Brokers can be rest assured that once a policy is accepted, commission will be paid until the policy cancels, even if their regulatory status changes.”
The Mortgage Practitioner sole trader Danny Lovey says: “It is a positive announcement as it has been standard market practice before Paymentshield’s move so the clarification from Halifax is welcome.”
Paymentshield chief executive Stuart Pender says: “Our position is you get paid commission for advising the clients. If you are not advising the clients then Paymentshield is basically supporting those clients. The position in product financial services markets is very clear and we are not alone in taking this stance.”