IFAs provide data on the range of commissions taken across all business written in a previous time period.The IFA commission rates disclosed in Menus one year are Property Depreciation Reports used to populate market data for the next year.Providers already hold data on commissions paid at individual case level, albeit this may be held in a number of different formats.However, given sufficient advance warning, a clear set of data requirements and some flexibility in delivery format, the cost of providing a download of actual data should not prove to be a barrier.
We recommend that all providers, both life offices and collective investment houses, be consulted fully on this to ensure costs are kept to a minimum.Any requirement to provide data on a more frequent basis could jeopardize the cost benefit analysis.We recommend that data for a time period of the previous 3 months would be preferable to having to submit data for a full year.
The frequency of reviewing market rates also impacts on costs for IFAs who will have to review their menu as frequently as the market rates change.Consideration was given to using IFA specific data from Menus in one time period to populate market data for the next time period.
There will be no policing of the accuracy of the bands disclosed at individual IFA level.
A simple numerical average across Menus would not allow for significant differences in the volumes of business written by different IFA firms.
The IFA data will be 2 dimensional – initial and renewal commissions, with the latter varying between premium and fund based.Any attempt to source market data directly from IFAs would be more challenging.There will be much greater variability in the way in which such information is held by different firms.There is, of course, a significantly greater number of IFA firms than there are providers, so the sheer mass of data to be collated and centrally analysed would be much higher.