Paymentshield slammed for trail commission cut
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Brokers are up in arms after having their trail commission slashed from 27% to 5% by Paymentshield.
Mortgage Strategy understands that Paymentshield has sent letters to a number of brokers explaining that their commission will fall to 5% from November 1 as they have not submitted any business with Paymentshield in the last 12 months.
This would mean a broker previously receiving £500 per month would now get just £93.
The insurance provider told brokers that by not submitting any business with them in the past year they had become a dormant agent and were therefore subject to changes in commission rates according to their contract.
It is believed that to receive their original level of commission brokers must submit one policy per month for six months to the firm.
A spokeswoman for Paymentshield says: “In line with the dormancy clause clearly stated in our terms and conditions, we can confirm that a number of brokers who are no longer active with Paymentshield have been notified of a change to their commission.
“However, should these intermediaries demonstrate a return to active submissions then their commission will return to its previous rate.”
One broker who contacted Mortgage Strategy says: “My firm is not dormant, it is still placing business, just not with Paymentshield, because it has become increasingly uncompetitive in recent years and I have a duty to find the best deal for my clients.”
Another broker says: “This move will cost intermediaries hundreds of pounds each month, threatening their businesses.”
General insurance distributor Safe&Secure says it is also surprised at the decision.
Jason Berry, sales and marketing director at Safe&Secure, says: “It is a strange move by Paymentshield.”
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Readers' comments (25)
Anonymous | 17 Oct 2011 9:54 am
Talk about biting the hand that feeds it.
Paymentshield have shown time and again that they no longer care about the broker market.
*No more commission into retirement
*Cutting commission to 5% so that you are forced to place business with them (It would help if they weren't so expensive!)
*AND now they are also hounding my customers to cross sell against my back. (Just read some of the comments from members of the public complaining about their calls below)
http://whocallsme.com/Phone-Number.aspx/03333440125
Oh how the mighty have fallen
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Ralph | 17 Oct 2011 10:16 am
The emphasis should be on the customer, not the broker. " No more commission into retirement " sums it up quite well !
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Anonymous | 17 Oct 2011 10:23 am
Yet another company cutting payments to brokers, This doesn't force me to send business to them, sorry, no more from me and many more I suspect.
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John Wood | 17 Oct 2011 10:25 am
Well, I assume the brokers will do just that - rebroke to another company - DMS or someone - who will pay decent commissions.
Why not contact a provider and see if they'll offer a block transfer?
(And Yes I am a broker who USED to use Paymentshield.)
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Anonymous | 17 Oct 2011 10:27 am
Typical
Honesty and integrity has vanished from most providers nowadays. They have not heard of TCF yet!!
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Jane | 17 Oct 2011 10:37 am
For the anon comment @ 10:27 I think you will find that the C in TCF relates to the customer at the end of the chain who is buying the product or service, and not the broker.
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Christopher Hall | 17 Oct 2011 10:39 am
I am surprised that brokers continued to support Paymentshield after the stopped paying commission into retirement. Now is the time for all brokers to boycott Paymentshield once and for all. It should not be too hard as they are expensive anyway.
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Anonymous | 17 Oct 2011 10:53 am
If you've submitted business in the last 12 months, you've nothing to worry about. They are just weeding out brokers whom are sat on commissions and not submitting business.
Read between the lines and stop all these silly comments.
And yes i am a broker, and i dont want to see brokers earning commission whilst not in the SAME INDUSTRY. Its also pushing up compliance costs as a whole.
I want brokers to be on the same page resulting in commission being pushed up, as oppose to paying to ex brokers...
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Anonymous | 17 Oct 2011 11:01 am
Jason Berry of Safe & Secure says this is a 'strange move' by Paymentshield - yet page 4 of the S&S contract states the following:
Introducer fees will continue to be paid providing at least two new client referrals are successfully converted to signed up cases by Safe & Secure per month
Meaning that if you dont hit the minimum standard with S&S your commission will stop completely! Not much different to Paymentshield's stance, and that of many other insurers!
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Anonymous | 17 Oct 2011 11:11 am
Well have you not tried Keystone yet? Short term IP, 5 star rated. You should take a look!!
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