LAW SOCIETY RULES

Law firms handling life and pensions policies must now disclose commissions payable to clients before business is transacted.

Previously it was possible to ignore discussion about commission until the deal was completed.

The new Law Society rules came into force on 1 January, but do not as yet apply to collective investment products, points out Ian Muirhead of Sifa.

The rules come as a variety of commission choices from full indemnity to level commission on regular premium contracts are introduced by life companies. Firms must decide the basis of handling commissions with their clients. If clients do not want to pay fees, their consent will be necessary to retain commission.

Muirhead says the emphasis could change to ongoing servicing as a result of level commission.