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Hit the trail, Bradshaw tells protection providers

Financial services veteran Paul Bradshaw says the protection is the last outpost of up-front commission and is urging providers to build trail into sales.

Bradshaw, guest speaker at the Protection Review dinner in London last week, said the only way for intermediaries to provide adequate reviews and support to customers on protection policies is if they are paid to do so.

He said the general shift away from transaction-based IFA services towards trail-based commission has not happened in the protection marketplace.

Bradshaw said: “Protection is the last bastion of big up-front indemnity commission and whereas we all recognise that much effort goes into the sale and managing the underwriting process, some rebalance towards a trail model would surely be a healthy development for customer and intermediary alike.”

CBK principal Peter Chadborn is calling for providers to offer advisers a more flexible commission structure. He says he is pleased the industry is starting to talk about offering a choice of commission structure, which would see providers pay half the fee up front and half as trail, but he says there are barriers to introducing such a structure, including legacy systems and the willingness of advisers.

Chadborn says: “It is interesting to hear people complaining that every year we all agree on the need for innovation but seldom do we get it. From what I can gather, the commission theory is a prime example of an idea that is generally agreed as being a good one but is likely to fade away unless life offices do something about it rather than just talk.”

But Direct Life & Pensions sales and marketing director Rich- ard Verdin says: “We have flexible commission options. If you want 50/50, then do one customer on non-indemnity and another on indemnity. I generally do not see the need for change.”

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