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L&G accused of shunning IFA business as the axe is taken to EPP commission

Legal & General is to stop paying commission to IFAs on 10-year executive pension plans and has slashed rates by nearly half for 15-year business.

Commission on new EPP business over 15 years will be cut to 80 per cent of Lautro rates from 140 per cent, which IFAs claim effectively shuts down new business through L&G.

L&G says the commission cut, which will be effective from January 27, will bring the charging structure of EPPs more in line with its other pension products.

Pensions marketing director Andy Agar says: “Of 22 providers in the EPP market, only seven are offering single-charge commission. We do not see the EPP as a short-term product going forward.”

Intelligent Pensions director Steve Patterson says: “This is not a price-driven market. The director of a company buying an EPP wants the right advice on the multitude of options open to him.

“This strategy of cutting back commission makes you think they do not see IFAs as their main distribution channel in the future. IFAs will recommend other providers rather than L&G for these contracts.”

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