Which type of intermediary remuneration is paid annually based on the value of a PRSA held by a client?

Prepare for the Qualified Financial Adviser (QFA) Pensions Exam 2. Test your knowledge with flashcards and multiple choice questions. Review detailed explanations for each question and get ready to succeed!

Multiple Choice

Which type of intermediary remuneration is paid annually based on the value of a PRSA held by a client?

Explanation:
Trail remuneration is the ongoing, annual payment to the intermediary that is calculated as a percentage of the value of the PRSA held for the client. This means as the fund value changes, the payment adjusts each year, reflecting the ongoing service and relationship. For example, if the PRSA value is €200,000 and the trail rate is 0.35%, the adviser would receive €700 that year. This contrasts with upfront remuneration, which is paid when the policy is set up, and with other forms that aren’t standard annual, value-based payments. The concept here is the ongoing link between the adviser’s pay and the client’s accumulated fund value.

Trail remuneration is the ongoing, annual payment to the intermediary that is calculated as a percentage of the value of the PRSA held for the client. This means as the fund value changes, the payment adjusts each year, reflecting the ongoing service and relationship. For example, if the PRSA value is €200,000 and the trail rate is 0.35%, the adviser would receive €700 that year. This contrasts with upfront remuneration, which is paid when the policy is set up, and with other forms that aren’t standard annual, value-based payments. The concept here is the ongoing link between the adviser’s pay and the client’s accumulated fund value.

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