Gerard McMeel

Document Type




The value added by financial intermediaries and salespersons is recognized by the often sizeable commissions paid by life insurers and other financial product providers to them when a deal is done. Given that the legal position is that independent financial intermediaries are the agents of investors, and not the product providers, this has always been difficult to reconcile with principles of fiduciary law. In particular, the potential for a conflict of interest is obvious. One solution is a regime of disclosure, although the extent of disclosure necessary has been much debated. The United Kingdom appears to have traditionally followed a disclosure model, at least for less sophisticated retail customers. However, U.K.’s financial regulator has resolved that, with effect from December 31, 2012, the appropriate solution to the conflict risk is to ban outright all payments by product providers to intermediaries. This Article describes in a little more detail that step and how the U.K. got there.



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