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Networks urge rise in IFA commission to push sales

IFA networks want to see the increase in charges on stakeholder products passed on in higher commission to their members to encourage more advisers to offer the suite.

Many IFAs said a 1 per cent cap made it uneconomical for them to sell stakeholder but more of those who take the multi-tie route may think the suite looks more attractive at 1.5 per cent.

Burns Anderson chief executive Ian Parsons believe if the increase in charges was passed to IFAs, more of the bigger groups would be interested in selling stakeholder.

He says: “The cap increase is a step in the right direction but it remains to be seen if this increase is passed on to IFA professionals. If the increase was passed on, it would stand to reason that we would see a steady rise in the popularity of stakeholder.”

The cap increase equates to an extra 5 per cent over the 10-year life of a policy or medium-term investment plan.

But providers such as Norwich Union believe the inc-rease will not necessarily be passed on in commission and any extra margin may be needed to fund admin systems.

Tenet Group chief executive Simon Hudson says: “Rai-sing the cap goes some way towards recognition that if the Government wants advisers to be involved, they will have to be paid sufficiently for the advice they give.”

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