Legal & General outlines RDR payment policy
Legal & General has outlined how payments to advisers will work after the retail distribution review.
Jamie Vale, platforms and distribution director of business development for L&G, said trail commission on existing products would remain while non-advised top ups on pre-RDR products would still pay commission.
For advised top-ups on existing products, Mr Vale said no commission will be paid but the provider will enhance the customer’s terms by increased allocation in the product or by reduced fund charges.
He said: “We have been running our RDR programme since the end of 2009 and this is the first phase of a timed release process, which will deliver a full ‘RDR compliant’ product range between now and the end of the year. It will come as no surprise that this is our top priority this year. Our first focus has been to ensure that our existing legacy products weren’t affected by RDR implementation.”
Mr Vale said that where there is advice on a fund switch on a collective or when there is advice to move platform, trail commission will stop.
He added: “Where an adviser gives advice to top up or increment a collective that was sold pre RDR, we will continue to pay trail on the original collective investment but the topped up / incremented units bought as a result of advice post RDR cannot pay commission.
“Advice to switch from accumulation units to income units (and visaversa) or reduce a holding will not stop trail being paid.”