Hot topics for financial advisers
Our Firm Contact Centre's answers to common questions they have received from financial advisers in recent weeks.
What is the definition of commission?
This is any form of commission or remuneration, including a benefit of any kind, offered or given in connection with:
- designated investment business (other than commission equivalent);
- insurance mediation activity in connection with a non-investment insurance contract; or
- the sale of a packaged product, that is offered or given by the product provider.
For definitions of designated investment business, insurance mediation activity, non-investment insurance contract, packaged product and product provider please see our Handbook Glossary.
What is the menu commission calculator?
This is to help firms work out what to disclose in their menu. It helps advisers identify which of their commission shapes give the maximum net present value according to the assumptions in our rules. The 'help' button in the calculator lists all the different commission types and gives an explanations of what we mean.
When selling a regular premium collective investment scheme products the commission received may be called 'indemnity'/'upfront', but it is paid monthly as the product may be set up as a series of monthly single premiums. Here you should enter the commission as a monthly payment.
Can you give some general points on financial promotions?
- The FSA's financial promotion rules are relevant regardless of the type of media used.
- 'Cold calling' can be unsolicited phone calls or uninvited door step appearances.
- We have restrictions for firms wanting to send 'mailshot' letters. The restrictions vary depending on:
- the nature of the sender/the recipient/the nature of the product or service being sold;
- if a specific product or service is being sold;
- if it's considered to be a 'direct offer'; and
- if an exemption applies.
- The FSA does not pre-check financial promotions for firms.
- A website address is sufficient as a point of contact.
- Look out for our financial promotions guides, which we will publish in September.
