NEW CENTRAL BANK rules published today will allow customers to see how much commission their brokers are receiving from financial firms and ban the acceptance of hospitality gifts.

The regulator said the new rules aim to ensure transparency of commission arrangements between financial intermediaries – brokers and financial advisers – and product producers – banks and insurance firms.

Under the new rules, the Central Bank will require brokers and advisers to publish details of commissions they receive on their websites. They will also no longer be able to describe themselves and their activities as ‘independent’ if they are accepting commission for providing advice.

Certain criteria will have to be met in order for commission to be acceptable and brokers and advisers will not be allowed to link commission to targets that do not consider a consumer’s best interests.

Accepting free hospitality from banks and insurance firms, such as golf trips and sporting event tickets, will also be prohibited under the new rules.

The new rules will come into effect on 31 March 2020.

Gráinne McEvoy, the Central Bank’s director of consumer protection, said it is important that consumers are clear about the price they are paying for financial services.

“These new rules will provide much needed transparency around commission payments, allowing consumers to see what commission payments their financial advisors are getting for the products they are recommending,” she said.

McEvoy said the regulator took the decision to target hospitality such as golf trips as it considers these benefits are “designed to influence an intermediary to place business with a particular provider rather than to provide any direct benefits to consumers”.

“These amendments to the Consumer Protection Code will reduce the potential for bias on the part of financial intermediaries and will provide consumers with access to more information about how intermediaries are paid. Consumers will also be able to have confidence that when they receive advice that is marketed as being independent, that this advice is truly independent.”

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