Chief ombudsman Walter Merricks has raised concerns commission disclosure market practices are 'fundamentally flawed' and are at odds with basic legal principles.
Speaking at the financial services research forum, Merricks says agents in all non-financial industries are obliged to disclose any commission they receive, but even under the insurance conduct of business rules (ICOB) the requirement is for intermediaries to disclose commission to commercial, not retail, customers and only when they ask about it. He states: “This ought to engender some cause for thought as to why the basic legal principles about the boundaries of responsibilities have had to be distorted so substantially in our field. Are these legal principles out of date? Or are the m...
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