‘Sunset clause’ could solve legacy commission issue, says Skandia

SunsetInvestment platform Skandia is calling for a ‘sunset clause’ on commission received by advisers from legacy products after the implementation of the retail distribution review (RDR). Under this arrangement, advisers would continue to receive legacy commission for a set period of time in order to allow the industry to make a more orderly transition to the new adviser-charging model. The Financial Services Authority (FSA) is currently considering whether to make a distinction between non-insured and insured products, the latter possibly allowing legacy commission to be paid. Skandia believes that this would create an uneven playing field, which could lead towards product bias among advisers, while scrapping legacy commission outright could result in customers having to switch or take out new products, losing existing policy benefits and incurring extra charges. Peter Mann, chief executive at Skandia UK, said: “Our view is that the RDR aims of fairness, clarity and consistency will actually be better served by a pragmatic decision to apply a ‘sunset clause’ to the payment of legacy commission. Allowing legacy commission to disappear over an extended period, rather than in haste, will enable the industry to make a more orderly transition to adviser charging.” ©2011 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.