What is Remuneration? 

Remuneration is the payment earned by the intermediary for work undertaken on behalf of both the provider and the consumer. 
 

CML Financial act as intermediary (Broker) between you, the consumer, and the product provider with whom we place your business.

The Background

Pursuant to provision 4.58A of  the Central Bank of Ireland’s September 2019 Addendum to the Consumer Protection Code, all intermediaries, must make available in their public offices, or on their website if they have one, a summary of the details of all arrangements for any fee, commission, other reward or remuneration provided to the intermediary which it has agreed with its product producers. 

What is Remuneration?

Remuneration is the payment earned by the intermediary for work undertaken on behalf of both the provider and the consumer.   The amount of remuneration is generally directly related to the value of the products sold.

Statement of Charges – (Commission & Fees)

CML Financial may earn our remuneration on the basis of fee, commission or on the basis of a combination of these methods.

In circumstances where fees are chargeable or where you choose to pay in full for our service by fee, we will notify you in advance and agree the scale of fees to be charged. Where it is not possible to provide the exact amount, we will provide you with the method of calculation of the fee.

In all cases, if fees are to be charged for our service, we will notify you in advance of same.

What is Commission?

Commission is payment that may be earned by an intermediary for work undertaken for both provider and consumer.

There are different types of remuneration and different commission models:

Single commission model: where payment is made to the intermediary shortly after the sale is completed and is based on a percentage of the premium paid/amount invested/amount borrowed.

Trail/Renewal commission model:  Further payments at intervals are paid throughout the life span of the product.

Indemnity Commission

Indemnity commission is the term used to describe a commission payment made before the commission is deemed to be ‘earned’. Indemnity commission may be subject to a clawback (see below) if the consumer lapses or cancels the product before the commission is deemed to be earned.

Other forms of indemnity commission are advances of commission for future sales granted to intermediaries in order to assist with set up costs or business development.

Profit Share Arrangements

In some cases, the intermediary may be a party to a profit-share arrangement with a product provider and will earn additional commission.  Any business arranged with these product providers on a client’s behalf will be placed with the product provider because that product provider is at the time of placement, the most suitable to meet the client’s requirements, taking all the client’s relevant information, demands and needs into account.

Life Assurance/Investments/Pension Products

For Life Assurance products commission is divided into initial commission and renewal commission (related to premium), fund based or trail (relating to accumulated fund).

Trail commission, bullet commission, fund based, flat commission or renewal commission are all terms used for ongoing payments. Where an investment fund is being built up though an insurance-based investment product or a pension product, the increments may be based on a percentage of the value of the fund or the annual premium. For a single premium/lump sum product, the increment is generally based on the value of the fund.

Life Assurance products fall into either individual or group protection policies and Investment/Pension products would be either single or regular contribution policies.  Examples of products include Life Protection, Regular Premium Life Assurance Investments, Single Premium (lump sum) Insurance-based Investments, and Single Premium Pensions.

Investments

Investment firms, which fall within the scope of the European Communities (Markets in Financial Instruments) Regulations 2007 (the MiFID Regulations), offer both standard commission and commission models involving initial and trail commission. Increments may be based on a percentage of the investment management fees, or on the value of the fund.

Credit Products/Mortgages

Commission may be earned by intermediaries for arranging credit for consumers, such as mortgages. The single, or standard, commission model is the most common commission model applied to the sale of mortgage products by mortgage credit intermediaries (Mortgage Broker).

Clawback

Clawback is an obligation on the intermediary to repay unearned commission. Commission can be paid directly after a contract is concluded but is not deemed to be ‘earned’ until after a specified period of time. If the consumer cancels or withdraws from the financial product within the specified time, the intermediary must return commission to the product producer.

Fees

The firm may also be remunerated by fee by the product producer such as policy fee, admin fee, or in the case of investment firms, advisory fees.  At present we have no fee arrangements. 

Other Fees, Administrative Costs/ Non-Monetary Benefits

The firm may also be in receipt of other fees, administrative costs, or non-monetary benefits such as:

• Attendance at product provider seminars
• Assistance with Advertising/Branding

CML Financial commission options are displayed as a range, showing the maximum amount which can be received.  The level of commission depends on individual circumstances, based on the following factors:

• Intermediary discretion
• Whether the level of commission is negotiable
• Client relationship
• Length of time of the policy
• Amount of investment
• Length of investment
• Commercial decision
• Complexity of the case
• Product constraints by the product provider

Term Protection, Specified Illness, Mortgage Protection, Whole of Life, Pension Term Assurance and Income Protection

The above-named products provides for an initial commission as outlined within the commission documents.  These policies have an inbuilt recurring commission structure to remunerate the brokerage for reviews, service and claims support.  If for some reason a client moves or terminates their policy within a particular period of time, this might result in the provider seeking to “clawback” some or all of the commission paid to the broker depending on how long the policy was active with the provider. 

Savings and Investments

The above-named products typically provides for an initial commission as outlined within the commission documents.  Brokerages may also agree a recurring commission that may be based on a percentage of the value of the fund or the annual premium.   If for some reason a client moves or terminates their policy within a particular period of time, this might result in the provider seeking to “clawback” some or all of the commission paid to the broker depending on how long the policy was active with the provider. 

Defined Contribution product, Personal Retirement Bond, Approved Retirement Fund (ARF) and Annuity

The above-named products typically provides for an initial commission as outlined within the commission documents.  Brokerages may also agree a recurring commission that may be based on a percentage of the value of the fund or the annual premium.   If for some reason a client moves or terminates their policy within a particular period of time, this might result in the provider seeking to “clawback” some or all of the commission paid to the broker depending on how long the policy was active with the provider. 

Personal Retirement Savings Account (PRSA)

The above-named products typically provides for an initial commission as outlined within the commission documents with certain restrictions around PRSA’s.  Brokerages may also agree a recurring commission that may be based on a percentage of the value of the fund or the annual premium.   If for some reason a client moves or terminates their policy within a particular period of time, this might result in the provider seeking to “clawback” some or all of the commission paid to the broker depending on how long the policy was active with the provider. 

Mortgages – First-Time Buyer, Second and Subsequent Time Buyers, Mortgage Switcher and Equity Release

Credit intermediation with respect to Mortgages allows for an initial once off upfront commission to remunerate a Brokerage based on the advice, service and packaging of a mortgage.  If a client switches or ceases to pay a Mortgage repayment with the clawback period, the Brokerage will receive a pre agreed pro rata clawback within the timeframes stated with the commission documents. 

Click on a link below to access a list of the providers that our firm deals with, which for ease of reference is in alphabetical order.

Life Insurance and Investment Firm Providers

Lender Providers