Grant Thornton Financial Counselling Ltd acts as intermediary between you, the consumer, and the product provider with which we arrange your business.
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 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?
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.
What is Commission?
Commission is payment that may be earned by an intermediary for work undertaken for both provider and consumer.
There are different types of remuneration and different commission models:
- 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: 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.
Throughout this summary, there may be various commission options, ranges or maximum percentages of commissions shown.
Where these are shown, the basis on which the level of commission taken may be decided at our discretion, set by the product provider, or as otherwise agreed with you, and will be dependent on the type of policy, premium amount, length of term of the policy, length of investment period, our time spent in researching, advising and arranging product(s), complexity of the product(s) and service provided, seniority of personnel involved, amount of commission we deem to be appropriate to remunerate us for providing our services to you.
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.
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. Where we are engaged by our clients our fees and agreements are all documented as part of our engagement letters.
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.
Sustainable Finance Disclosure Regulation (‘SFDR’)
Sustainable investing is the process of incorporating environmental, social and governance factors into investment decisions. Sustainability is a broad term with many branches. The key legislative background is derived from the EU Taxonomy regulation, the Sustainable Finance Disclosure Regulation (‘SFDR’) and the Insurance Distribution Directive (‘IDD’).
The key product producers with which we engage have developed responsible investment as part of their investment philosophies and sustainability policies. These providers are obliged to specify certain classifications of funds identifying whether or not they meet sustainable characteristics. Some funds have very clear sustainability characteristics, with potential Principal Adverse Impacts also identified. However, some funds may not meet the sustainable standards for various practical and technical reasons.
We will engage with you to identify your attitude towards sustainable investing. We aim to provide you with investments to match your sustainable investment preferences. In some instances we may not be able to identify funds to meet these preferences and we will explain the alternative options.
Sustainability Remuneration Policies
We take due care so that our internal remuneration policy with respect to investment or insurance advice on insurance-based investment products (‘IBIP’s’) promotes sound and effective risk management in relation to sustainability risks and does not encourage excessive risk-taking with respect to sustainability risks.
Detailed information on the product providers with which we hold an agency and remuneration arrangements are provided within the Compliance with CP116 full briefing attachment [ 398 kb ].
