View more on these topics

Court case opens up disclosure issues

Protection and health insurance providers may have to disclose commission paid to advisers following a Court of Appeal case.

In Wilson v Hurstanger, the court found that £240 commission paid by lender Hurstanger to Coventry loan broker One Way Finance, who also charged his client a £1,000 fee on a £7,000 loan, should have been fully disclosed.

Law firm Fishburns solicitor Harriet Quiney believes that buy-to-let mortgage brokers charging fees and getting commission could face legal challenges.

ABI protection review chairman Nick Kirwan says despite the fact fee-charging advisers do not have an FSA require-ment to disclose commission, the court’s interpretation of the law of agency in this case means advisers and providers will have to do so in future.

He says: “Insurers may have to make the decision to disclose commission because they do not know which advisers charge fees and which don’t. They will have to disclose across the board to prevent the whole transaction being nullified and having to pay back premiums.”

Kirwan says many fee-based advisers are unaware of their agency obligation to disclose commission and consider they are working above board.

Quiney says: “This decision will apply to regulated and unregulated sales involving third-party brokers. As there are clear regulatory requirements to disclose commission, it is to be hoped that similar situations will not arise where the sale is covered by Cob, Icob or Mcob as commission will have been disclosed.

“However, not all sales of financial products are regulated by the FSA, in particular, buy-to-let mortgages.”

Recommended

Holloway moves to non-reviewable rates

Holloway Friendly Society is introducing non-reviewable rates on its classic plus income protection plan.It says the move is designed to end uncertainty about the future cost of premiums. Rates now only increase with age.Chief executive David Macgregor says: “The problem with income protection is the way some providers can increase premiums within a short time […]

That sinking feeling

Among the many tasks that are part of my new job, there is that of answering questions raised by users in our forums.

‘Europe is the best hope of overturning Asp tax charge’

The European Union could be the best route to end the 82 per cent death charge on alternatively secured pensions, according to Hornbuckle Mitchell.Speaking at the PIMS conference, the firm’s managing director Neil Marsh said the industry may be able to persuade the EU that the new Asp tax charges are unlawful as they are […]

Industry tax contributes equivalent of 36 hospitals or 600 academies a year

The financial service industry pumps enough into the UK economy each year to build 36 new hospitals or 600 city academies, according to reach from the British Bankers’ Association.In the first of a series of analysis reports on the financial sector, the BBA found the financial services industry makes a £50bn contribution to the UK […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com