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.”