I read about the three-year review of the impact of disclosure (Money Marketing, January 29) and learnt nothing new. I don't find that commission is begrudged me by a customer.
Why should commission be driven down when the cost of unknown levies and regulatory overheads go on rising and PIA-regulated independent advisers are treated like company employees but holding their own budgets?
The old Lautro scale is still a benchmark – wasn't that thoroughly debated and supported at its inception?
We asked for charges to be transparent in the new key features document and for that it should be welcomed. But it was not perfect.
I thought the PIA was supposed to review the disclosure key features wording. Commission does not make any difference to the product cost on some types, whether IFA-sold or sold directly by a provider. I have asked for this in writing and offered it as a support for key features wording.
Term insurance and even Peps are voluntarily key-featured. Yet the rigid wording of the 1994 KF document states that the advice "costs" £XXX. The wording says it includes company overheads and commission, but may not include the cost of life cover, hilarious if the product is a life policy. What the current wording does is to set the scene for company charges to be higher than commission, but commission is a cost clearly specified under that heading on page3. The cooling-off letters I have had as an own-case customer are awful in some cases as a dire warning of cost. What was intended as information appears as risk.
What is not mentioned is the possibility, where an up-front commission is paid and the policy does not continue in force past a specified number of years, of the adviser's commission being forfeited in part. Hence, the risk to the adviser against rebating. The key features and notices need reviewing but who will do it?
Or is everyone happy with it? Tell us.
David Dodds Insurance Services,