An adviser will allegedly lose £26,000 because of a Scottish Widows decision to cease paying non-indemnity commission from November, he has claimed.
In a letter seen by Financial Adviser, the Yorkshire-based adviser, who asked not to be named, told Scottish Widows that all commission had been “fully disclosed to clients and accepted by them”. He added: “What Scottish Widows is doing is retrospective”.
In August, Scottish Widows announced it would remove initial commission for all new and existing schemes, bar products launched before July 2000, to comply with department for work and pensions requirements. This came after the provider was criticised by intermediaries for a drop in its service levels since the March Budget.
Industry insiders’ experience of Scottish Widows’ subsequent performance has been varied. David Curley, an adviser at Lancashire-based Logic Wealth Planning, said his firm had not seen an improvement in Scottish Widows’ telephone response times.
However, Sam Caunt, director of Northamptonshire-based Future Life Financial Planning, praised the company for making “positive noises” following his criticism.
Right to reply
A Scottish Widows spokesman said: “Although we continued to pay this commission until November 2014, unlike trail commission, it wasn’t commercially viable to maintain this structure, and we communicated to the market in August that we would be removing this facility in November.”
On the issue of service levels he said: “We recognise our recent service levels have fallen short of the high standards our customers rightly expect of us. We are making significant additional investment to help us get back to where we need to be.”
