Context
BIBA has launched a guide helping to demystify the commission model. The new guide aims to help consumers and businesses understand the benefits to them of the commission model, which has been used successfully for centuries. Further, it will help dispel suggestions that commissions should be removed or capped.
The new guide, available to members online, explains in detail the potential harm that could arise from abandoning the commission model including the removal of access to free advice for customers at point of sale based on the impact the Retail Distribution Review in 2012 had on access to independent financial advisors. It highlights that the commission model allows brokers to help customers of all sizes regardless of an individual customer’s contribution, via commission earned to brokers’ overheads and expenses and explains how it benefits insurers through saving in product distribution.