View more on these topics

Legal & General slashes IFA pension commission

Legal & General has stunned IFAs by slashing commission across its pension range, with advisers claiming that they can no longer effectively sell the products.

IFAs have reacted angrily to the cuts, claiming the move shows that L&G is only interested in distributing through link-ups with Barclays Bank and Alliance & Leicester.

L&G claims that the new commission structure simply brings the pension products into line with the rest of its range.

The company began slashing IFA commission on pensions in April 1999 and followed with cuts to endowment and bond commission in 2000 and 2001 respectively.

The latest move sees commission on personal pensions, group pensions and free-standing AVCs fall from 5 per cent level or 35 per cent of Lautro rates plus override to 1.25 per cent level plus override or 12 per cent of Lautro rates plus override.

The reductions by L&G, which was the driving force behind the Government&#39s 1 per cent charge cap on stakeholder, mean that IFAs will have to renegotiate terms with employers for fees to provide advice to new members joining existing schemes.

A statement from L&G says: “Legal & General introduced the &#39single charge cap&#39 for existing pension customers in April 2001, giving them the better of stakeholder pension charges or, if cheaper, their current pension charges.

“The reduction in commission has been delayed by 14 months. This simply reflects the low level of charges that are now being enjoyed by our existing customers.”

IFA Roger Sanders Associates principal Roger Sanders says: “Legal & General are giving two fingers to the IFA sector and saying that everything we do now is for Barclays Bank. This is totally and utterly inflexible and unacceptable.”


Lenders offering poor protection products, claims broker

Mortgage borrowers do not have an adequate savings safety net and are being exploited by lender selling poor-value protection products according to broker, Goodfellows.Goodfellows managing director Simon Burgess says: “The lenders continue to offer increased and inappropriate finance to already overburdened borrowers, combined with in-house protection products that offer poor value.”

To DB or not to DB?

The mass migration from defined-benefit pensions to the defined-contribution alternative is attracting the attention of politicians, the media and the public. DC is often made out to be an inferior mode of pension provision but this is patently not the case.With DB, the employer effectively makes a promise – not a guarantee – to provide […]

Rates of change

I am now heading towards the conclusion of this series on the methods and assumptions which should be used in formulating an investment recommendation for a client based on targeted levels of benefit.I have been discussing the way in which expected benefits from different types of pension scheme should be taken into account, dividing this […]

BBC man to head FSA press office

The FSA has appointed John Fryer as its head of press office and events to replace Vernon Everitt, who is moving within the organisation to become director of human resources. Fryer, 57, joins in mid-July from the BBC, where he is business editor of Radio 4&#39s Today Programme and Radio 5&#39s Wake up to Money […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm