Broker Network takes commission disclosure fight to parliament

See also: Grant Ellis interview at the Biba conference

The Broker Network has written to 2,500 brokers in the UK urging them to lobby their local MP in a last ditch attempt to stop the FSA forcing them to disclose how much commission they receive.

Chief executive Grant Ellis has sent a letter to all brokers across the UK in an effort to “get the political spotlight trained on the FSA”.

He has urged brokers to lobby the FSA in a “cohesive and co-ordinated fashion” by responding to its discussion paper on transparency, disclosure and conflicts of interest in the commercial insurance market, by the 25 June deadline.

In the letter, Ellis said it was about time that brokers took a stand against the insidious creep of regulation.

“I believe that if we act in a co-ordinated fashion our voice can be heard,” he said. “I attach a template letter which I would ask you to recreate on your own headed paper and send to your local MP. We need to generate an awareness of this ridiculous situation among grass root politicians. In this way we may be able to get the political spotlight trained on the FSA and have its masters get it to justify its actions.”

Ellis said that he supported transparency as it related to the role of the broker when dealing with customers, but thought transparency of commission was irrelevant.

The FSA is currently consulting with the industry on whether to make brokers disclose their commission to the client on every transaction, in a bid to make the industry more transparent.

Ellis continued: “The [FSA] suggests in the discussion paper that it would prefer an industry led solution although it says it is sceptical about the industry’s ability to achieve this as views on the matter are polarised. However, there seems to be an air of resignation across the industry that we should propose a solution, including one for commission disclosure, in order to head off the possibility of more draconian regulations being imposed if we don’t. I believe this is a huge mistake.”

Steve White, head of compliance and training at Biba, said it was important that brokers continued to send their views to the FSA as it will take into account the content and volume of responses.

He said: “Biba welcomes the widening of the debate that we are now witnessing, but we must all not lose sight of the fact that the discussion paper has a response deadline of 25 June.

“It is very important that they take the time to respond and send a copy of any letter sent to their MP to Hector Sants [FSA chief executive],” he added.

To download the letter, click on the link in the right hand column.