Article date: 13 March 2002
Norwich Union is to introduce a new commission structure forIFAs on stakeholder and personal pension business with effect from6 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 ofcommission options for IFAs.
- IFAs who want to maximise initial commission will be able todo 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 aslight increase to the amount of initial commission currentlypaid (the average term of Norwich Union's stakeholder andpersonal pension business is more than 20 years).
- A new sliding scale of commission payments will mean thatshort and medium term business of less than 20 years willgenerate a lower level of initial commission (see notes to editors).
- For those IFAs requiring ongoing remuneration, Norwich Unionwill pay:
- Fund-based commission only, or
- A combination of initial commission and fund-based renewalcommission.
Norwich Union has led the way in promoting stakeholder pensionsover the past year. As a result, stakeholder has been a hugesuccess for Norwich Union, with the company winning almost a thirdof the market through the IFA channel.
Norwich Union believes the outlook for stakeholder is positiveand expects this business to continue to represent a majorproportion of its sales.
Commenting, Jerry Barnfield, director of pension development atNorwich Union, said: "We have supported the IFA market right fromthe outset on stakeholder, through a period of great uncertaintyand transition and we will continue to do so. Norwich Union willcontinue to offer initial commission to IFAs but we have takensteps to re-align our commission structure on regularcontributions.
"For most of the stakeholder business we receive through IFAs,these changes will have a limited impact because most policies arefor terms longer than 20 years.
"Our market share and continued investment in promotingstakeholder pensions demonstrates how important this market remainsfor Norwich Union."
From 6 April 2002, the Norwich Union initial commissionstructure for stakeholder and personal pension business will be asfollows:
|Policy Term (Years)|
|Less than 5||5 - 9||10 - 14||15 - 19||20+|
Norwich Union is the UK's largest insurer. It is the UK'slargest provider of life, pensions and investment products and oneof the leading IFA providers. IFAs provide around 75% of thecompany's long-term savings business.
Norwich Union has strategic alliances with over 20 buildingsocieties and other leading UK brand names including Tesco PersonalFinance Limited and The Royal Bank of Scotland Group.
- Norwich Union's news releases are available on this internetsite.
- A selection of images is available from the CGNU Newscast siteat www.newscast.co.uk
- An ISDN facility is available for studio quality interviews.Call the press office on 08703 66 68 73
For all life & pensions media enquiries 08703 66 68 73
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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|