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Standard Life axes trail commission to SJP introducer

Standard Life 480

Standard Life has terminated its agency agreement with the IFA firm which administers the legacy assets of clients moving to St James’s Place.

Policy Services takes on the legacy assets and trail commission of clients moving to SJP advisers, with the firm splitting the ongoing commission with the adviser.

However, Standard says it is axing all trail payments it has been making to the firm.

Policy Services says it works with a large proportion of SJP partners but would not disclose the exact number.

The decision means affected Policy Services clients will have to go to Standard Life directly or find another IFA to service them.

Standard Life UK managing director retail Ronnie Taylor says: “We have taken the decision to terminate our agency agreement with Policy Services Ltd. We have been in discussions with Policy Services for some time regarding their advice and client servicing process.

“They have now confirmed to us that they operate a sub-contracting process to tied agents of another organisation who cannot advise on Standard Life products. This is not a decision we have taken lightly. Terminating an agency agreement is a very rare outcome for us.”

Policy Services managing director David Ness says: “Standard Life has been aware of our business model for years and has clearly chosen to take this action now for commercial reasons ahead of RDR. The really frustrating thing in all of this is that Clients who have chosen to deal with us are being overruled.”

The firm says it is currently considering whether or not to challenge the decision.

Standard refused to rule out cancelling servicing arrangements with other firms.

A spokeswoman says: “We do not want to speculate on actions we may take across a range of variable circumstances. Each particular set of circumstances will be considered individually, but our primary concern will be that of the best interests of our customers and their advisers.”

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. “Standard refused to rule out cancelling servicing arrangements with other firms.”

    Great… No wonder IFAs treat them with such skepticism when it’s clear they’ll cancel agency requests to take control of client banks. They can’t even have that large a direct sales force any more surely? They fired loads of them about a year ago.

  2. The second to final paragraph is potentially very worrying for us all!
    Sign of things to come from providers?

  3. So let me get this right. A client has various investments, some of which are with Standard Life. That client then becomes a client of SJP, but even though SJP can’t advise on it, they still receive half of the legacy commission on the old stuff (whilst presumably only recommening SJP products for new investments). Am i the only one that finds this a bit of a bizarre situation? What ongoing service are SJP provding to their clients with legacy products that justifies them receiving a commission? TCF? RDR? I’m not surprised Standard Life have questioned this. Why aren’t the FSA?

  4. man on the moon 23rd August 2012 at 5:46 pm

    @James

    been thinking the same thing for years.

    they mandate existing non SJP plans to policy servicing, who service them but its really the SJP advisor who deals with them for new business and servicing. I have been confused on this for years.

    where are the regulators in all of this??

  5. Maybe the commercial reason is down to the amount of business this arrangement has seen move from Standard Life into SJP’s own products??

  6. the reason is very simple SL rely on their back book for their profitability, if that back book withers away they are in unlikely to be as profitable. SL will see this as the test case that gives them carte blanche and with an impotent trade body they will have a clear run.

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