Insurance In Focus

Commission disclosure and what it means for you

Commission disclosure rules mean brokers must tell you what they earn. Understand your right to that information and how to compare advice.

Since 2024, insurance firms must tell you how they are paid. The FCA’s commission-disclosure rules, reinforced by the Consumer Duty, mean you can see the commission and fees built into any policy a broker or adviser sells you. The point is to let you judge whether the recommendation serves you or the seller.

What firms must disclose

When a broker or adviser sells you a policy, they must give you, before you commit:

  • The existence and amount of any commission they receive from the insurer.
  • Any fee they charge you directly.
  • Whether the advice is independent or restricted to a panel.
  • The range of insurers they approached.

For some products the disclosure is a clear monetary figure. For others it is a rate or range. Either way, the information must be clear enough for you to act on, not buried in small print.

Why the Consumer Duty raised the bar

The Consumer Duty requires firms to deliver fair value and to act in your interests at every stage. On commission, that means a firm should not let its earnings skew the product it puts in front of you. A policy that pays the broker more but fits you worse is a fair-value problem, and the FCA can act on it.

The Duty also expects firms to explain things in a way you can understand. Vague references to “commission may apply” do not meet that test. You should see the actual cost of the distribution, alongside the premium.

How to use the disclosure

Treat the disclosure as a comparison tool. Before you buy:

  • Ask for the total distribution cost, not just the headline premium.
  • Check whether the broker is whole-of-market or tied to a few insurers.
  • Compare the recommended policy with one or two direct alternatives on cover and price.
  • Keep the disclosure document in case the advice proves unsuitable later.

If the disclosure is missing or unclear, that itself is a red flag. Read how the Consumer Duty changes what firms owe you, and our guide to insurance distribution and commission for the wider picture.

If you were not given proper disclosure

If you were sold a policy without clear commission information and it later proved poor value, you can complain to the firm and then to the Financial Ombudsman Service. Our guide to how to complain about an insurer or broker walks through the process.

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