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Standard system blunder slashes commission

Standard Life is having to renegotiate remuneration terms with several IFAs after a system glitch led to a shock cut in commission streams of up to 60 per cent.

The problem started last March when Standard cut indemnity commission on group pension schemes with a charge above 1 per cent but its systems failed to apply this to schemes where advisers had taken a 50/50 split of indemnity and level commission.

Last November, Standard extended the commission cuts to all group pension schemes and estimated a 20 per cent fall in commission but some of advisers saw a double hit when the earlier error was picked up and they saw their commission fall by up to 60 per cent.

Marketing director Barry O’Dwyer says Standard only became aware of this when advisers complained. It is trying to negotiate a restructuring of commission arrangements with the five IFA firms involved.

He says: “We are now aware of this and seeing if we can restructure the commission to reduce the drop.”

Central Financial Planning, one of the IFA firms affected, budgeted for a 20 per cent cut, as highlighted in communications from Standard, but the advisers did get extra commission for nine months.

Director Ian Smith says: “It is a nasty hit and we are talking to Standard Life about ways of getting round it.”

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