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Network in attack on rivals over &#39dodgy&#39 commission figures

Protection network Premier Connections is attacking rival networks,

claiming they are “using dodgy mathematics” to make IFA commission

rates look better than they are to attract new members.

It says networks are disingenuously advertising the level of

commission they pay in a manner which makes it appear to be higher

than it is so that advisers are tempted to join.

Director Darren Ferneyhough says there are a number of ways that

commission rates can be massaged so that they appear higher.

One common trick of the trade is to advertise the gross commission

rates that advisers get from providers rather than the net figures

that firms pay advisers.

Ferneyhough is concerned that even with the prospect of FSA

regulation in 2005, the problem will not be addressed because,

technically, what the networks are doing is not against the rules.

He wants the FSA to force networks to advertise commission rates on a

like for like basis when it is designing its regulatory regime.

He says: “The protection market is awash with different commission

rates being quoted by various networks and providers and, as a result

of some of the smoke and mirrors trickery being used, there is a

great deal of confusion in the marketplace at the moment.”

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