McCarney Financial Services Limited act as an intermediary (Broker) between you, the consumer, and the product provider with whom we place your business. As a result we receive remuneration from product providers and the purpose of this document is to clearly outline and relay this remuneration to our clients.
The Background
Pursuant to provision 4.58A of the Central Bank of Ireland’s September 2019 Addendum to the Consumer Protection Code, all intermediaries, must make available in their public offices, or on their website, 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
Remuneration is the payment earned by the intermediary for work undertaken on behalf of both the provider and the consumer. The amount of remuneration is generally directly related to the value of the products sold.
Single Commission Model
Where 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 Model
Further payments at intervals are paid throughout the life span of the product.
Indemnity Commission
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.
General Insurance Products
General insurance products, such as motor, home, travel, health, retail or liability insurance, are typically subject to a single or standard commission model, based on the amount of premium charged for the insurance product.
Profit Share Arrangements
In some cases, an intermediary may be a party to a profit-share arrangement with a product 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.
Investments
Investment firms, which fall within the scope of the European Communities (Markets in Financial 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.
Credit Products / Mortgages
Commission may be earned by intermediaries for arranging credit for consumers, such as mortgages. The single, or standard, commission model is the most common commission model applied to the sale of mortgage products by mortgage credit intermediaries (Mortgage Broker).
Clawback
Clawback is an obligation on the intermediary to repay unearned commission. Commission can be 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.
Fees
The firm may also be remunerated by fee by the product producer such as policy fee, admin fee, or in the case of investment firms, advisory fees, Please see our Terms of business document for more information.
Other Fees, Administrative Costs / Non-Monetary Benefits
The firm may also be in receipt of other fees, administrative costs, or non-monetary benefits such as:
- Attendance at product provider seminars
- Assistance with Advertising/Branding
McCarney Financial Services Limited commission options are displayed as a range, showing the maximum amount which can be received. The level of commission depends on individual circumstances, based on the following factors:
- Amount of investment
- Length of investment
- Intermediary discretion
- Whether the level of commission is negotiable
- Client relationship
- Length of time of the policy
- Commercial decision
- Complexity of the case
- Product constraints by the product provider
See below a list of the providers that our firm deals with, which for ease of reference is in alphabetical order. Click on the provider links for more information.
Life Insurance Providers
General Insurance Providers
Lender Providers
Investment Article 3 / MIFID Providers
We trust that this document in conjunction with our Company Terms of Business clearly outlines and discloses in detail all remuneration received by our company, however, should you have any queries in relation to your own specific products or polices don’t hesitate to call us on 01 830 5432 or email info@mccarney.ie.
