With referral fees out the window, brokers must have breathed a collective sigh of relief on learning that the FSA has decided to take a relaxed view on one of their few remaining mildly dubious income streams.

A “thematic” review carried out by the obsolescent regulator has found that some brokers derive “up to 5% of top line revenue and significantly more of bottom line profits” from flogging policyholders instalment payment plans (so-called premium finance) with interest rates of up to 20% APR and may occasionally neglect to mention cheaper finance options available direct from insurers or elsewhere.

But on the basis that “it is very important that there is a vibrant, sustainable broker market out there” the FSA has decided to turn a blind eye – so long as brokers are “transparent” (presumably not in the ghost-broker sense) and bear in mind that they are supposed to be looking after clients’ best interests.

Perhaps the whole ‘brokers need to make a living somehow’ argument could have been borne in mind during the referral fees debate. Bit late for that though. Great to see the return of pragmatism all the same!


No responses yet

Leave a Reply

Your email address will not be published. Required fields are marked *