Consumer Protection Code, all intermediaries, must make available in their public offices, or on their website if they have one, a summary of the details of all arrangements for any fee, commission, other reward or remuneration provided to the intermediary which it has agreed with its product producers.
What is Remuneration?
What is Commission?
provider and consumer?
Single commission modelWhere payment is made to the intermediary shortly after the sale is completed and is based on a percentage of the premium paid/amount invested/amount borrowed.
Trail/Renewal commission modelFurther payments at intervals are paid throughout the life span
of the product.
Indemnity commission is the term used to describe a commission payment made before the
commission is deemed to be ‘earned’. Indemnity commission may be subject to a clawback (see
below) if the consumer lapses or cancels the product before the commission is deemed to be earned.
Other forms of indemnity commission are advances of commission for future sales granted to intermediaries in order to assist with set up costs or business development.
Profit Share arrangements
provider and will earn additional commission. Any business arranged with these product providers on a client’s behalf will be placed with the product provider because that product provider is at the time of placement, the most suitable to meet the client’s requirements, taking all the client’s relevant information, demands and needs into account.
Life Assurance/Investments/Pension products
For Life Assurance products commission is divided into initial commission and renewal commission (related to premium), fund based or trail (relating to accumulated fund).
Trail commission, bullet commission, fund based, flat commission or renewal commission are all terms used for ongoing payments. Where an investment fund is being built up though an insurance-based investment product or a pension product, the increments may be based on a percentage of the value of the fund or the annual premium. For a single premium/lump sum product, the increment is generally based on the value of the fund.
Life Assurance products fall into either individual or group protection policies and
Investment/Pension products would be either single or regular contribution policies. Examples of products include Life Protection, Regular Premium Life Assurance Investments, Single Premium (lump sum) Insurance-based Investments, and Single Premium Pensions.
Instruments) Regulations 2007 (the MiFID Regulations), offer both standard commission and
commission models involving initial and trail commission. Increments may be based on a percentage of the investment management fees, or on the value of the fund.
paid directly after a contract is concluded but is not deemed to be ‘earned’ until after a specified period of time. If the consumer cancels or withdraws from the financial product within the specified time, the intermediary must return commission to the product producer.
Other Fees, Administrative Costs/ Non-Monetary Benefits
- Attendance at product provider seminars
- Assistance with Advertising/Branding
March 31st 2020