What can I expect from a Financial Broker?
Firstly, a Financial Broker will take time to get to know you, your personal circumstances and your financial goals. We will discuss your options and help you come up with a financial plan. Secondly, we will research products that match your needs from the range of companies we deal with, providing a “fair analysis” of the relevant market. This means we will generally research a majority of the product providers in that market. As an example: when it comes to life and pension products, there are eight companies active in the Irish market. Financial Brokers will generally deal with at least five of these eight companies however, we here at Cathedral Financial Consultants Ltd deal with all eight and more, which means you get market-wide advice from one source.
How much will it cost to engage a Financial Broker?
When a Financial Broker is paid by commission, there is generally no extra charge compared to dealing directly with the provider. So you get a choice of many providers, impartial advice and personal service without any extra cost and without the hassle of finding the best deal yourself. Any additional fees payable by you will be outlined in our terms of business given to you before we start any work for you.
How expert are Financial Brokers?
Financial Brokers are obliged to have a qualification or be accredited by experience. We are full-time professionals, experts in our area. We constantly study all relevant markets and receive regular briefings from various product providers.
How can I be sure my Financial Broker will put my interests first and not be guided by getting the best commission?
Like any other business, a Financial Broker’s best customers are repeat customers and new customers referred by satisfied clients. It is therefore in our interest to put your needs first in any recommendations we make. In addition, by law Financial Brokers must put your interests above commissions in their recommendations. Brokers are subject to rigorous enforcement rules by the Central Bank of Ireland; they may face fines, revocation or disqualification if they do not follow those rules.
Commission rates for the same type of financial products tend to be similar so there should not be an incentive for a Financial Broker to favour one provider over another. The commission on individual life, investment and pension products must be disclosed to you. Financial Brokers will be happy to demonstrate their impartiality – ask them for details of the companies they will be researching on your behalf and the results of their analysis; they are obliged to summarise this in a “reasons why” letter. Financial Brokers must account for this statement should they be called to do so by the Central Bank or Financial Services Ombudsman.
Once you engage a Financial Broker you could ask to pay for their services directly by fee rather than through the policy. Most Financial Brokers will accommodate this.
How secure am I when dealing with Financial Brokers?
Financial Brokers offer an advisory service and will never ask for monies to be made payable to them. Instead you pay the insurer or product provider in full, or by direct debit directly to these institutions. This means there is no solvency risk in dealing with Financial Brokers. Financial Brokers are covered by the Investor Compensation Company Ltd (ICCL) which covers 90% of eligible client losses up to a limit of €20,000 per client. In addition, Financial Brokers are required to hold professional indemnity cover for negligent errors of €1.5 million.
Finally, in addition to strong regulation by the Central Bank of Ireland, if you have a complaint against a Financial Broker that has not been addressed through their internal complaints procedure, you can refer the matter to the Financial Services Ombudsman who will investigate with no charge to you.