The census also revealed that 15 per cent of AMI members expected insurance trail commission to provide some part of their pension plan. Two-thirds of those suggested they would be at least partly reliant on the income trail commission generated, while a third believed they would not rely on it at all.
As part of the study, AMI revealed that 77 per cent of its members believed providers should continue to pay trail commission for insurances even though the firm or the adviser had retired. 50 per cent believed insurance trail commissions should continue to be paid when the firm or adviser was no longer FSA authorised, for reasons other than retirement.
Commenting on the findings, Rob Griffiths, associate director of AMI, commented: “The issue of continued trail commission payments into retirement has been a key concern for AMI members recently although our census does show that only 15 per cent are planning to use trail commission from insurance as part of their pension plans. The vast majority of AMI members are keen for providers to continue to pay trail commission for insurances into retirement, although only 50 per cent believe these commissions should be paid to firms no longer authorised, for reasons other than retirement.”
Anthony Badaloo, manager at Church Hill Finance, said: “Trail commissions are an important part of an intermediaries income in just the same way interest rates are a part of a lenders income. If too many companies cut off payment trails brokers will vote with there feet. If trail commissions were stopped altogether brokers would have to increase their fees.”
