Skandia sends advisers form to switch away from commission
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Skandia Investment Solutions has defended its decision to send out a form to advisers to allow them to switch away from commission to adviser charging, saying it is designed to give advisers a head start on moving their business over pre-Retail Distribution Review.
In an email sent to adviser clients, seen by FTAdviser, Skandia states it wants to ensure that advisers have all the relevant links and documents they need to switch to adviser charging on the platform.
The email contains a link to its adviser fees advance authorisation, a four-page form that needs to be completed and signed by each client.
Several advisers had expressed concern over the move, with one stating that it seemed as though Skandia was demanding authorisation from clients for their intermediary to continue to receive ongoing commissions after 31 December, even where no ‘change event’ has occurred.
Another adviser, who asked not to be named, told FTAdviser that the form will prove to be an administrative “pain in the neck” for some advisers and claimed that it may contravene the terms and conditions of existing contracts with Skandia for trail which is already in payment.
He said: “I’m not worried about my clients but some advisers will have problems with this. It is only Skandia Investment Solutions doing this and not Skandia Life.”
Skandia said that these advisers had misinterpreted the intention of the form, stating it is designed to help advisers with the move to adviser charging post-RDR and that failure to fill it out will not result in trail commission being halted unless new advice has been provided.
A spokesperson for Skandia said:“The form allows advisers to move over to adviser charging and this will give advisers a head start. If clients sign the form, commission will be stopped from the end of this year in line with RDR rules.
“Clients who do not sign the form will only automatically be switched to adviser charging if they receive advice from their financial adviser after 31 Dec 2012.
“If they don’t sign the form then they can continue to receive legacy commission on their investment products after 31 Dec 2012 so long as they do not receive financial advice on these products.
“However, as soon as advice is received on these products, this will trigger adviser charging and commission payments will stop. The forms are there to help advisers do the change so they don’t have a headache at the end of the year.”
The spokesperson emphasised that other providers will likely follow suit.