Fidelity Life will stop paying initial commission on its CPI increases from March next year, says the firm in a statement. However, it says renewal commission will continue to increase based on the CPI-adjusted premiums, just as it does currently.
“We acknowledge this change may have a financial impact on some advisers,” says the firm. “That’s why we’re providing six months’ notice to allow as much time to adjust as possible.”
A review of the firm’s remuneration system revealed it had paid initial commission on CPI increases for some ex-Tower policies that weren’t eligible for the payment.
“While we won’t be looking to recoup this, we do need to correct our mistake,” says the firm.
“So from November 2020 we’ll no longer pay initial commission on CPI increases on these policies – October will be the final month of payment.”
Adrian Riminton, Chief Distribution Officer and joint acting CEO at Fidelity Life, said: “We will be working with advisers over the next six months as they adjust to this change.”
He says the company is also upgrading its Apollo, eApp and Adviser Centre to provide “…advisers with improved reporting and insights”.
“We are also introducing a new commission framework which will reward advisers appropriately under the new regulatory environment.
“These and other initiatives are part of our 2025 Winning Aspiration, our business-wide transformation strategy which aims to improve our business and ensure our sustainability over the long term.”