Broker Bias And What The Financial Conduct Authority Says
In 2014, the FCA carried out a review of rewards and conflicts of interest for insurance brokers. We’ve highlighted some of their findings:
“The structure of some intermediary businesses and sources of revenue created significant conflicts of interest. Particularly where firms or groups fulfilled multiple roles in the distribution chain and acted as agent for both the customer and insurer in the same transaction.”
“Many customers still perceive their intermediary as an independent adviser working as their agent and seeking quotes from a number of insurers. Even where this may not be consistent with the nature of the relationship described in the disclosure received.”
“Commission rates for “add ons” such as legal expenses insurance or premium finance can be as high as 50%-100%. “Admin Fees” now account for 7% of total revenues with no standard pricing structure."