Standard commission terms – which most IFAs receive - will increase to 1% of the loan amount released by the customer. Currently they receive 0.5% of loan value plus £150. The new terms will come into force on 1 January 2005.
Norwich Union's commission structure change reflects the higher costs IFAs now face in a newly regulated lifetime mortgage market, and rewards those who choose to specialise and invest in the growth of the market.
Mark Kelly, director of Norwich Union Personal Finance, said: “This is good news for IFAs. 98% of IFAs who write business with us will benefit from these changes. Not only have we increased our standard terms to 1% of the loan amount released, we have also adapted our commission structure so that we can remunerate those who specialise in the market.
“Under the new standard commission rate, an IFA will receive £500 for advising a customer who takes out a £50,000 lifetime mortgage – an increase of £100 on current terms.”
