Compliance
Untangling the web Explaining commission disclosure rules on your website Nina Morgan Compliance Officer NACFB
Rob Levitt Compliance Officer NACFB
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hen carrying out Minimum Standards Reviews (MSRs) with Members over recent months, we have seen a developing trend which we are keen to nip in the bud. It relates to disclosure information, and how and where it is displayed on Members’ websites. From our perspective we are seeing a lack of sufficient information, so this article serves as a gentle reminder of what you need to consider. Whilst we are predominantly discussing website content, do bear in mind it could also relate to brochures and other types of literature including direct mail. Disclosure information is covered by the FCA’s rules and regulations regarding financial promotions, and it is an extremely important part of treating customers fairly, with openness and transparency. Adhering to these rules will ensure that your clients are given information that is clear, fair, and not misleading. Remember, the FCA has the power to remove any financial promotion that does not comply with the rules and guidance. Aside from the obvious reputational damage that can result from having your financial promotion removed, your firm could be fined. 18 | NACFB
Disclosing commissions serves to highlight to potential and existing clients the nature of your firm’s relationship with lenders including any commissions or fees you may receive from them. In general, the FCA’s rules on this topic are high-level asking firms to make clear the existence and nature of commission arrangements with lenders where these might affect the client’s decision-making when thinking about which lender to use. The disclosure must cover how the arrangements could affect the price payable by the customer. Brokers must also ensure that the disclosure is prominently disclosed and not hidden away on a part of the website that is rarely visited. For example, for some brokers, the following statement may be suitable: “[Firm name] is a broker not a lender. We are independent and have whole of market access. We may receive commissions that will
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Disclosing commissions serves to highlight to potential and existing clients the nature of your firm’s relationship with lenders including any commissions or fees you may receive from them
