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Integrity is vital in rebroking

Having worked over the years with a number of advisers who were, let us say, keen on bond rebroking, I have always been a bit suspicious of whose interest is really being served.

What Glynn Downton fails to point out (Money Marketing, September 28) is that the new bond he has recommended to his clients almost certainly has a limited administration or establishment charge, usually levied at 0.5 per cent of the investment value for the first five years. While Mr Downton claims that the benefit to his client of his advice is around 8,000, a quick bit of maths suggests that the uplift for the client is probably nearer 3,500 when the additional charge is taken into account.

Some people will accuse me of being a bit sniffy about this. After all, the client will certainly benefit in this case. However, if the provider in question did not have a special offer available at the time, which I presume is the case here, or a less generous IFA did not give up some commission, as has Mr Downton, the client would probably end up in a worse position after rebroking.

We should take advantage of insurers buying business if this is benefits our clients. However, insurance companies are not charities and we must all endeavour to understand all policy charges before advising clients if the integrity of the profession is to remain intact.

Malcolm Robinson

IFA consultant,

HW Financial Services,

High Wycombe, Bucks

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