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Why should Whitehall dictate to our industry?

Open letter to John Edwards, chief executive of Clerical Medical

Clerical Medical was quoted in Money Marketing as saying”we should anticipate that the Sandier report will bring about a 20 per cent reduction in commission across the board”. Other writers also portray this scenario as inevitable.

Can you please explain how it is that the Treasury or regulators repeatedly dictate to a private industry like ours?

Commission is nothing to do with compliance or regulation. The public is not being forced to buy expensive products. Look what happened when they were last encouraged to buy so-called cheaper products – Equitable Life.

Costs for IFAs are going through the roof (compliance, professional indemnity insurance, staff salaries, etc.) so now is not a time to cave in to calls for lower commission.

The Government somehow dictated to our industry what we must charge on stakeholder pensions. Standard Life tells me it will take 15 years for this to be profitable.

Or in reality are insurers simply subsidising this unprofitable business by robbing other policyholders and shareholders?

Either way, a private industry which is not a monopoly should not have its profit margins (or anything else) dictated by Government.

It is a shame that because insurers seem incapable of talking with a single strong voice, we are repeatedly the targets for so much Government interference and “consultations”.

Colin Langton



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