David Taylor, head of corporate benefits at Morgans says he welcomes providers’ attempts to restructure their commission offerings going forward, but attacks Widows for moving the goalposts on plans already put in place.
Widows’ move is the latest stage in the gradual squeeze on historically generous commission structures. It says it is only bringing its charging structure in line with what most other providers do and adds that the majority of single premium and transfer payments come in when schemes are set up.
From July 1 Widows introduced commission clawback on all single premium and transfer payments into all of its group pension policies. This change affects all payments received after that date, whether to existing or new policies and to existing and new schemes. The commission clawback applies across all group pensions contracts including Section 32a, group stakeholder, Cimp and institutional investment bonds, as well as GPPs. The provider says it brings its group pension products into line with its individual pension products. It point out that there will be no change to the clawback arrangements for regular premiums and this won’t affect any single premiums or transfer payments that were received prior to 1st July.
Taylor says: “I have always worked with providers on a 50/50 relationship. However it seems that in this instance Widows has no regard for the relationships they have with the companies and individuals who have supported them for many years. I absolutely support the new structure for terms being offered after the announcement however openness is key in any provider/adviser relationship, and the carte blanche retrospective imposition of these terms for all advisers and schemes displays a level of arrogance and lack of empathy which I would not expect from a company like Scottish Widows.”
Jim McCaffrey, head of corporate pensions marketing at Scottish Widows says: “We were one of the few remaining providers paying commission in this way who had no clawback arrangements for single premium or transfer payments. This change brings us in line with the rest of the market. With changes of an emotive nature like this it is hard to keep everyone happy.”