Paymentshield chief executive Stuart Pender has criticised advisers for leaving orphan clients behind when they retire, insisting they should not be paid trail commission.
The comments will come as a shock to the estimated 1,500 brokers who were hit by Paymentshield’s decision in October last year to stop paying trail commission to brokers who are no longer regulated by the FSA.
Pender says: “If these advisers had taken care of their clients and sold their business rather than just exiting and leaving them as orphan clients, then we would still be paying commission to the adviser that could advise on that business. Policyholders should be paying for getting advice. They should not be subsidising agents who have left the industry.”
Money Marketing has seen promotional literature, dated 2004, in which Paymentshield pledges to continue to pay trail commission “for the life of the policy”.
Its agency terms and conditions are headed by the slogan, “Protecting your clients is an essential part of your job, protecting your future is an essential part of your life – with Paymentshield, it’s never been easier”.
But the firm points out the T&Cs also state: “This agreement will terminate if your licence to conduct business is removed, suspended or impaired by any order or decree of any regulatory or judicial authority.”