Scottish Amicable is to stop paying initial commission to intermediaries on all new regular premium ...
Scottish Amicable is to stop paying initial commission to intermediaries on all new regular premium pensions with immediate effect as it believes the practice is no longer sustainable, writes Simon Falush.
Tony Kempster, Prudential's intermediary business director, said: 'The long-term view is that initial commission based pensions business cannot be sustained in current market conditions.
'Providers and advisers alike must adopt a sensible and sustainable approach to profitability.'
Scottish Amicable will now focus on selling single premium products such as the Pru Bond, single premium pensions and its flexible annuity product.
Kempster said there were plans to introduce an extensive retraining programme and a marketing campaign to reflect the new focus of the company. He said that there were no immediate plans to lay off any of the sales force but that in the long term the structure of the company was being examined.
Intermediaries will have until 10 September to get illustrations from ScotAm for business they have already recommended.
Pipeline business will have to be with ScotAm by 12 October where the product is being sold on an initial commission only basis and until mid-December for those that are being sold with a combination of initial and renewal commission. Investment Week 20 August 2001
Annuity market worth £4bn in 2017
Oversees £30bn of advised and D2C assets
£1bn business since inception
Considered doing so in 2015
Client communication considerations