For business done before the implementation of the RDR on 1 January 2013, trail commission on existing products will remain although any increase would trigger adviser charging and thereby end commission payments. Top-ups will not end commission but will be subject to a separate adviser charge.
Also, existing trail commission can be transferred to a new adviser if the client so directs.
For business done after the RDR, adviser charging can be arranged in two ways: Premium Plus will deduct the charge from client payments prior to investment in the bond, while Partial Withdrawal will take the charge from the assets in the bond.
David Fagan, chief executive officer of Legal & General International (Ireland), said: “We are confident that our offshore bond will be RDR ready well in advance of year end and we will offer a high level of flexibility on both adviser charge payment and trail commission.
“Provided we have explicit instructions from clients, we can facilitate payment of an adviser charge for both pre and post RDR business. As we are accountable to HMRC for money being paid into and out of a bond, we will closely monitor payments taken from the bond assets, as these will count towards the 5% annual tax deferred withdrawal allowance.”