A Kendal IFA is criticising life offices which fail to switch renewal commission to follow advisers when they move firms and says he will be forced to charge clients a fee to compensate.
But insurers are saying it is up to the IFA to sort out the situation with the original firm that holds the commission agreement.
MacBeth Scott & Co Life and Pensions Services adviser Ian Jones says he recently changed firms but Friends Provident refused to transfer the renewal commission, even if the client has requested it.
Jones says he had sold a lot of Friends with-profits bonds, bringing in a substantial amount of renewal commission. However, his original firm is still being credited with the trail commission despite no longer working on the cases and being unable to give advice. Jones says he will be forced to charge his clients a fee for servicing their policies.
Friends says it is up to the IFA to organise the change with the original firm, saying that it cannot switch the payments without authorisation from the firm that the agreement is with.
But Jones says firms would be unlikely to give up the money and the life company should be willing to do as the client instructs.
Friends Provident retail communications manager Jim Murdoch says: “The IFA needs to contact his original employer or partner to give us the authority to transfer the commission. We have transferred the servicing rights but we need authorisation from the original firm to transfer the commission.”