Partnership Assurance and Legal & General are set to pay Origen Financial Services commission of 5 per cent and 2.5 per cent respectively under the annuity outsourcing deal which the firms are launching in March, Money Marketing understands.
MM revealed earlier this month that Origen had agreed to pass corporate annuity clients with pension funds worth less than £50,000 to L&G and Partnership.
Directly Financial director Stuart Bayliss says the commission rates are about 70 per cent higher than those normally available for specialist advisers providing whole of market solutions.
Specialist retirement advisers get around 1.5 per cent commission on conventional annuities while general IFAs get 1 per cent.
For enhanced annuities, specialists get up to 3 per cent while non-specialist advisers get 1.5 per cent.
Under the deal, Origen will search the open market if requested by a client but those who do not request advice will be channelled to either L&G or Partnership.
Bayliss says: “Annuities are a pooled product. Commission levels of this size are bound to penalise customers and my customers will be among those who will pay for Origen’s commission.”
An Origen spokesman says: “The commercial agreements for this solution have not been finalised but whatever level is agreed will not have an impact on the market annuity rate.
“Origen does get preferential rates because of the larger volumes of business we place along with greater member communication, processing and administration than is undertaken by certain specialist smaller annuity IFAs.”