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. 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.
Farrelly Financial, Mortgage Ireland is remunerated by commission and other payments from product producers or lenders on the completion of business. You may choose to pay in full for our services by means of a fee; our fee structure is outlined below. Where we receive recurring commission, this forms part of the remuneration for initial advice provided. We reserve the right to charge additional fees if the number of hours relating to on-going advice/assistance exceeds 3hrs, these fees will be charged in line with our below fee structure. We will notify you in advance when these fees are applicable.
In certain circumstances, it will be necessary to charge a fee for services provided. In other circumstances where fees are chargeable for where you choose to pay in full for our service by fee, we will notify you in writing in advance and agree the scale of fees to be charged if different from fees outlined below.
You may elect to deal with us on a fee basis. Director’s - €250 hourly rate Senior Advisers - €100 hourly rate
Additional fees may be payable for complex cases or to reflect value, specialist skills or urgency. We will notify you in advance of providing you with these services, our scale of fees for such cases range from a minimum of €100 per hour to a maximum of €250 per hour.
Life and Pensions
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.
Farrelly Financial may be remunerated by fee from a product provider such as policy fee, admin fee, or in the case of investment firms, advisory fees. If we receive commission from a product provider, this will be offset against the fee which we will charge you. Where the commission is greater than the fee due, the commission will become the amount payable, unless an arrangement to the contrary is made.
Where a commission or fee is received from a product provider, this is a maximum fee we will receive and therefore is subject to change. We may take a reduced remuneration in some circumstances and this will be disclosed to each client as per the Central Bank Consumer Protection Code regulations, on a client by client basis.
Insurance Based Investment 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 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. Examples of products include Life Protection, Regular Premium Life Assurance Investments, Single Premium Insurance-based Investments, and Single Premium Pensions.
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.
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.
Commission may be earned by intermediaries for arranging credit for consumers, such as mortgages. The single, or standard, commission model i the most common commission model applied to the sale of mortgage products by mortgage credit intermediaries.
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.
Philip Farrelly & Co. Financial Services Ltd t/a Farrelly Financial, Mortgage Ireland, is regulated by the Central Bank of Ireland.