A Plymouth IFA has been in dispute with L egal & General over its refusal to transfer renewal commission to his new firm even though he is continuing to service the clients.
Wealth Management (Plymouth) principal Alan Leigh set up his own firm, bringing his clients with him, when his former employer sold the goodwill in the business to a new partnership.
L&G has accepted the transfer of servicing rights to their policies but refused to transfer renewal and servicing commission without written agreement from the firm responsible for the sale.
But Leigh says the FSA handbook allows him to receive commission where the firm responsible for the sale “has passed on its right to receive commission”.
A letter from L&G says it will not transfer commission rights because “renewal commission is seen as continuous payment for the original advice”. However, L&G says it has reviewed its interpretation of the conduct of business rules since Leigh's original complaint last year and will now allow his firm to receive payments if clients are receiving ongoing advice.
Leigh says: “The ludicrous situation exists whereby I have exclusive serving rights to my clients' policies but a different firm, from whom they have never received any advice or had any other dealings, receives the associated renewal commission.”
L&G spokeswoman Lynn Webb says: “We will transfer commission to another IFA firm if it has given advice on investments to the same customer after the sale made by the first IFA firm. We need a letter of authority from his clients stating that they are receiving investment advice from him.”