Norwich Union is to introduce a new commission structure for IFAs on stakeholder and personal pension business with effect from 6 April 2002.
Norwich Union is to introduce a new commission structure for IFAs on stakeholder and personal pension business with effect from 6 April 2002.
The key elements of the new structure are:
- Norwich Union continues to pay initial commission
- Norwich Union will also continue to support a range of commission options for IFAs.
- IFAs who want to maximise initial commission will be able to do so by accepting no renewal commission.
- For those IFAs requiring initial commission only:
-
- On business with a term of 20 years or above there will be a slight increase to the amount of initial commission currently paid (the average term of Norwich Union's stakeholder and personal pension business is more than 20 years).
- A new sliding scale of commission payments will mean that short and medium term business of less than 20 years will generate a lower level of initial commission (see notes to editors).
- For those IFAs requiring ongoing remuneration, Norwich Union will pay:
-
- Fund-based commission only, or
- A combination of initial commission and fund-based renewal commission.
Norwich Union has led the way in promoting stakeholder pensions over the past year. As a result, stakeholder has been a huge success for Norwich Union, with the company winning almost a third of the market through the IFA channel.
Norwich Union believes the outlook for stakeholder is positive and expects this business to continue to represent a major proportion of its sales.
Commenting, Jerry Barnfield, director of pension development at Norwich Union, said: "We have supported the IFA market right from the outset on stakeholder, through a period of great uncertainty and transition and we will continue to do so. Norwich Union will continue to offer initial commission to IFAs but we have taken steps to re-align our commission structure on regular contributions.
"For most of the stakeholder business we receive through IFAs, these changes will have a limited impact because most policies are for terms longer than 20 years.
"Our market share and continued investment in promoting stakeholder pensions demonstrates how important this market remains for Norwich Union."
-ends-
From 6 April 2002, the Norwich Union initial commission structure for stakeholder and personal pension business will be as follows:
| Policy Term (Years) | ||||||||
| Less than 5 | 5 - 9 | 10 - 14 | 15 - 19 | 20+ | ||||
| 25% of current level | 50% of current level | 75% of current level | 90% of current level | 105% of current level | ||||
Norwich Union is the UK's largest insurer. It is the UK's largest provider of life, pensions and investment products and one of the leading IFA providers. IFAs provide around 75% of the company's long-term savings business.
Norwich Union has strategic alliances with over 20 building societies and other leading UK brand names including Tesco Personal Finance Limited and The Royal Bank of Scotland Group.
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Press office contacts:
| Out of hours | ||||
| James Evans, Norwich Union | 08703 66 68 78 | 07790 487105 | ||
| Louise Goffee, Norwich Union | 08703 66 68 70 | 07810 057362 | ||
| Ian Beggs, Norwich Union | 08703 66 68 71 | 07790 487533 |