Prudential says it will support advisers in the changing market environment by maintaining an initial commission option and introducing a factory gate pricing model on its unit-linked bond in the third quarter.
The two payment options will run in tandem from the autumn. The company has not set a deadline for withdrawing its current initial commission version of the bond.
Advisers taking the factory gate pricing option will then negotiate their remuneration with their clients.
The new pricing options form part of Pru’s overhauling of its UK business. Part of this restructure will see Pru’s protection and healthcare products sold through PruProtection, a new company which is being formed as a 50/50 joint venture with South African insurer Discovery. Pru says the existing distribution arrangements remain unchanged.
A Prudential spokesman says: “Pru is committed to the adviser market and in particular to the unit-linked bond market. We are introducing a wider choice of remuneration options for advisers. We expect, just like many other providers, that more advisers will move their businesses to new models and choose to receive their remuneration in different ways, making a transition away from provider funded initial commission over time.”