Alexander Forbes has halted the practice of accepting contingent commissions following a review of commission arrangements in its UK and South African operations.
The South Africa-based broker said in a statement that such commissions were largely derived from UK business and accounted for about £2.5m in revenues per year, less than 1.5% of its annual revenues from risk services business.
Rael Gordon, group chief executive of Alexander Forbes, said that the change would begin “effectively from the start of” 2005.
Alexander Forbes, the world's 10th-largest broker, follows the lead of five other brokers in ending the practice.
Since the New York attorney general announced a lawsuit against Marsh & McLennan Companies (MMC) in connection with the practice, MMC, Aon, Willis, Arthur J Gallagher and Jardine Lloyd Thompson have dropped contingent commissions.
