AXA Wealth has confirmed that all of its commission-paying products have flexible charging structures, which can be adjusted post-RDR to reflect the fact that commission is not being paid on the additional money paid into an existing policy.
Early in the FSA’s RDR consultation process, it was highlighted that some providers may not be able to amend their charges on increments to reflect the fact that commission will no longer be allowed to be paid for advised top-ups. This could leave some clients in the position where they are effectively paying twice for the advice – first through the adviser charge, and second through commission that cannot be stopped and is ‘retained’ by the provider through product charges. Some providers allow for varying commission levels by varying allocation rates, however the FSA will not permit allocation rates of more than 100% post-RDR.
Clients who choose to top-up an AXA Wealth pre-RDR commission product, including the Retirement Wealth Account* and all offshore products, can be confident that product charges will be reduced as commission will not be paid to advisers or retained by AXA Wealth. Commission on the Elevate platform is paid via the fund manager rebate and, where commission is not paid to an adviser, the rebate is directed to the client’s cash account where they can either re-invest or use towards charges or other cash withdrawals to minimise the need for disinvestment.
AXA Wealth urges adviser firms to establish the position of all the providers they currently use to ensure value for money.
Nick Lee, head of corporate relationships, AXA Wealth, said: “Advisers need to ensure a product is value for money for their client and this can be an area where unnecessary cost is passed on to the client due to some providers having less flexible systems and charging structures. Advisers and clients alike can be confident that whatever business they write with AXA Wealth in 2012 will be fit for purpose in 2013 and beyond.”
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