COMMISSION TO IFAs

Legacy_user

Can you help?

Whilst browsing the financial sites over the weekend, I saw an article about a company who (for £34 p.a.) could claim back the commission paid to the IFAs who sold the policies to me.

Unfortunately, I cannot find it now!

Has anyone come across this?

Imagine the possibilities!!!

Thanks, Jackie

Galstonian

Surely this would be someone who would sell you new policies and give you the commission rather than someone who can take legitimately (and I use that word in its strictly legal sense) earned income away from a third party?

Darryl

Nope - you're wrong Glastonian :P

The website you want, Jackie, is:

http://www.intelligentmoney.com/

I'm looking into this service myself - their website claims I can receive up to £40k in refunded commission over the next 25 years or so.... not bad for a £420 outlay (£35 x 25).

I'll be posting my reaction to this service in the Savings and Investments board when I have spoken to IM.

Darryl.

MSE_Martin

This is a very interesting offer, but I think it's worth remembering it must be considered in light of the Discount broker marketplace not the standard market place.   It uses 'how much we save you over IFAs' the question is how much will it save over the best discount brokers.

There are a number of elements that need considering here

i. For buying ISAs and unit trusts, the price is made up both from the discount on commission & the buying arrangement the company has with a fund manager.  This can mean one company takes more money but still offers a lower price.
ii. An annual fee means you pay when you dont use it
iii. Cavendish online rebates all commission for a one off fee - for something like life assurance, if this is all you will buy then as it lasts 25 years this is a much cheaper way to do it.
iv. If you cancel this policy - ie stop pyaing the £35 (which is only an offer price, it could be higher after Feb) the company retains the commission without paying you a cheque. I dont like this. It means you are locked in for the life of a product.

In many ways i prefer traditional discount brokers (unless you're investing huge amounts) where there's either no fee or a one off lock in fee.

martin

payless

Did look at this yesterday, but decided not to comment until some had posted an actual experience.

Hope they have all the right IT setup to deal with the reconcilation of the very large number of small commissions that will come thro' their books.

Galstonian

I'm not wrong just puzzled.

I never realised that the customer could ask the provider to pay renewal commission to anyone who is registered to accept it. I assume that this is really just the equivalent of an execution only broker for staying put.

I don't think I have any policies with renewal commssion but I'll check.

Please let us know how you get on.

Pal

I am not particularly an expert on commission payments but my understanding is that when a contract is sold it is assigned to the advisers "agency".  This agency then receives both any up front commission plus the annual renewal commission.

It is perfectly reasonable to ask a provider to change the agency so that another company receives the annual renewal commission, and in my experience (through my work on corporate investment policies) providers are perfectly happy to do this. I assume this is to allow for someone who moves to a new adviser ans asks them to monitor and advise on their existing portfolio.

payless

Having ran an IFA practice for some years, I suppose I could class my as an expert on commission payments

Life / Cic insurance
WoL
Endowments
Personal pensions
Some investment bonds and most ISAs
(the listed site gives a wider list)

all would have renewal commission (usually 2.5% on regular premium  and 0.5% on lump sums) set into the original plan as default , unless the adviser gave it up to give better terms (like in the Cavendish case)
see original illustrations- always indentified post 1995 (and in some before that)

Some companies won't allow agencies to be transferred (especially if sold by tied adviser not IFA) , the original adviser may get a letter asking if its OK. There was talk of companies who did not offer  "advisory/servicing" not being allowed to take over the plans from some providers - but that idea never took off.

Personally if I had an IFA I might initially ask them to do something about sharing the commission rather than just transferring.

payless

So if you have say £120pm of regular premium insurance, the renewals will cover their fee (so long as they have the sytems to collate and pay out)

The big money is the renewal on actively managed ISAs
(not usually index trackers) ,. as they pay around 0.5% pa on fund value.

Darryl

I read Martin's views with interest. I've also just spoken to the CEO of IntelligentMoney.

For my £35 p.a. payment, I can get back the commissions on my:

Mortgage - when I re-mortgage
Fund ISA
Personal Pensions
Income Protection Insurance

While others may rebate commission on one-off things like Life Insurance, I don't think any others say they'll give you back all commission on all these products?

To me, £35 p.a. seems like a small price to pay.

Darryl.

Darryl

I've also asked the CEO of IM to join in this debate.

(So, there's one more user Martin - do I get any commission ;-))
Darryl.