Speak up before new moves are set in stone

While the new government is still a bit of a novelty, the one thing we must not do is sit back and wait to see what presents they deliver at Christmas and beyond.

Why? Smaller broking firms are suffering, so now is the time to shout about the main issues while government plans are being laid down – it’s more difficult to change something that’s set in concrete.

Any new regime will inevitably bring with it new regulation. Whether that means a new learning curve for all, a revisit of old chestnuts (like commission disclosure) or a more realistic and hopefully more benign view of levies remains to be seen.

But silence or a wait-and-see policy isn’t good for business – it is imperative to make a noise now. Moaning and groaning among ourselves will have no more impact than similar moaning among brokers about direct writers did 20 years ago.

As far as commission disclosure is concerned, you have three options. This first is do nothing, cross your fingers and hope the issue will go away.

The second option is to offer disclosure to your clients, knowing that very few will seek the information. Think about it: if an important client came to you today and asked about your commission earnings, what would you say? Again, you would have three choices for your response:

a) tell them to mind their own business;

b) lie through your teeth; or

c) tell them.

Even the weakest link would know that answer c) is correct, so why not make a virtue of it?

Finally, the third option is: be proud of the commission you earn by explaining in glowing terms what you do for your client. No one thinks you work for free. All anyone wants is a reasonable bottom line.

And while on the subject of commission, this is a soft market and likely to remain that way for a while at least. Seek out any of the myriad new underwriters and underwriting facilities that are hungry for business, but check out their credit ratings too.

And then there is the unfair Financial Services Compensation Scheme (FSCS) levy. There is a chance for some brokers to claw some money back – regulators have said they will carry out a review if a broker has submitted an incorrect return. The return should be based on eligible income, in other words only arising from clients who could benefit from the FSCS.

If the entire broking income has been declared, the FSA will consider amending levies due. You should contact the FSA (email is definitely best) or ring us at the IIB. It’s not easy to calculate; discrepancies have come to light now because of the focus on the enormous hike in amounts demanded.

With all these issues challenging the industry, there’s never been a better time to belong to an effective trade association like the IIB. Brokers must add weight to lobbying on the unfairness of fees.

And don’t forget to join the Insurance Times Fair Fees campaign (insurancetimes.co.uk/backfairfees). The stronger the lobbying, the more likely the action. IT

Barbara Bradshaw is chief executive of the Institute of Insurance Brokers.