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NU calls for scale of fees as it warns against axing commission

Norwich Union expects commission to stay after the Sandler review but under a regime of greater disclosure, where the commission is expressed and paid as a fee.

The company says it is encouraged by Sandler&#39s understanding of the importance of commission and says abolishing it would be a “nail in the coffin” of financial services.

Under the NU proposal, submitted in its response to Sandler&#39s review proposals, IFAs would draw up a fee scale and offer clients the option of paying a fee up front or included in the price of the product.

Any surplus commission could be rebated into the product or held on credit for future advice.

If the commission fell short, NU says advisers could cover the cost of that shortfall as a goodwill measure.

Speaking at the Sofa conference in Birmingham last week, NU director of marketing Robert Fletcher said: “From our discussions with the Sandler team, we think they have a good grasp of the economics and the softer factors that are related to commission.

“If commission was abolished, it would be another nail in the coffin of UK financial services.”

Derek Cummings & Co chairman Barry James says: “I have never had any problem with the concept of commission and nor have any of my clients.”

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