ABI calls for scrapping of upfront commission - papers 21st Feb

Upfront commission allows advisers to earn thousands from the sale of even low-premium products, as the insurance company assumes the consumer will pay for the product over 20 to 25 years, but rolls-up the commission into one lump sum paid to the adviser as soon as the product is sold. Financial advisers rely on upfront commission for most of their income but the alternative - paying for services via fees, as with solicitors - has not taken off. Instead, the ABI proposes today to replace upfront commission with a mix of initial plus "level" or "trail" commission, which is only paid if th...