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Pearls of wisdom on indemnity

Whenever an industry issue reaches a certain critical mass, there will always be a pundit persuaded to peek out from under the nearest stone to add his or her two-penn’orth.

Therefore, it was with trepidation that I read Peter Hargreaves’ latest pearls of wisdom regarding indemnity commission in Money Marketing last week.

As head of a company which promotes the purchase of products by direct invitation, his opinions are not entirely relevant for the coalface adviser who deals directly with the public and lives or dies by the service provided.

To suggest that indemnity commission is an issue flies in the face of reality. Indemnity commission is dripfeed commission which has been factored by the insurer allowing the adviser to enjoy enhanced cashflow.

Some advisers are fortunate in that they do not rely on indemnity commission but the majority still do.

Wiser heads than Mr Hargreaves are required to provide a workable solution to the matter. Should it be allowed? What measures can be introduced to allow an easy transition. Discount brokers inhabit a different world from the rest of us. They are cocooned by the regular renewal and fund-based commission which has built up as a result of bulk mailshot tactics.

My advice to Mr Hargreaves is, steer clear of these matters and concentrate on your own business concerns.

Alan Lakey

Highclere Financial Services,

Hemel Hempstead,



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