Insurer Aegon has warned of the "disastrous" ramifications of removing trail commission following a fund switch - a move the FSA hinted at in its latest consultation paper on legacy commission.
In the November consultation paper (CP11/26) on the treatment of legacy assets, the FSA set out its long-held intention to allow trail commission to continue to be paid from 1 January 2013 on contracts set up before that date. However it set out plans to ban 'legacy' commission - money due to an adviser as a result of a change to the existing contract made at any point after 1 January next year. It was assumed fund switches would not come under the legacy ban because the switch is not an "event" involving new money and would therefore not result in "additional payments" or commission ...
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