Head of pensions marketing Paul Goodwin says that, despite the market changing through the introduction of personal accounts and the retail distribution review, initial commission can still be as profitable as the fee-based option.
He says: “Norwich Union remains supportive of the payment of initial commission for GPP schemes where it suits an advisor’s business model and meets our profit targets. The initial commission market is as profitable as the fee-based market, as long as schemes are priced with the level of sophistication that we employ.”
The announcement follows Axa’s decision to withdraw initial commission from its corporate pensions products as it moves to a fee-based model.
The firm also believes that initial commission helps broaden retirement savings as employers are not keen to meet the full cost of advice for GPPs.