I am writing in reply to Ian McIver’s article in last week’s Money Marketing, headlined, Falling short on income in retirement.
There are a number of issues that Mr McIver fails to address when considering any reputable retirement solution. The primary issue is ongoing service to the client.
The treating customers fairly principle applies to all business conducted. If trail income continues to be paid, there is a duty to the client to provide ongoing service. As the ex-member is deauthorised, he/she will not be able to provide this service.
Indeed, many product providers and investment houses are discontinuing trail income where evidence of ongoing servicing cannot be provided. Any network receiving trail income based on business written by an ex-member has a duty to ensure that ongoing service is provided.
Backing up the Burns-Anderson Retirement solution is a team of dedicated IFAs that continue to deal with the needs of the clients who are, effectively, paying for this service.
To reflect the cost of advice and service, we offer a flexible commission split and an income end date. The benefits to the client are that they enjoy a seamless transfer and continue to receive a high standard of service. We also make a commitment to write all new business maximising trail income, which could result in an increasing income in retirement for the ex-member.
Network members are liable for their own advice when part of the network and once they have left. As PI policies work on a claims-made basis, the firms that pay towards the policy at the time a claim arises are indemnified above the applicable excess.
If an ex-member has not purchased any run-off cover, they have not contributed towards that cover and will be liable for the full amount of any redress.
We always encourage our members to take out professional indemnity run-off cover to make sure that they themselves are covered for all eventualities in retirement. They are, of course, still liable for any excess payment on any upheld complaint.
Managing Director (IFA)