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Insurance And Financial Planning

In insurance and financial planning, commission sharing involves paying part of the compensation received by the firm, independent partnership, or independent representative (advisor) (registered with the Autorité) to another authorized person. When two people sell a product or provide a service together, it is not considered commission sharing, but rather a joint sale in which both people are responsible to the client.

The firm may share the commission it receives with the following entities only:

Independent representatives (advisors) and independent partnerships may share their commissions with the following entities only:

  • an independent representative (advisor) or independent partnership
  • a firm other than a deposit institution
  • an agency or a dealer governed by the Real Estate Brokerage Act

Advisors working for a firm or independent partnership may receive a commission or sum from commission sharing, or share their commission, through this firm or partnership only. They cannot under any circumstances pay part of their commission directly to the person sharing it, nor receive one directly from the latter.

An advisor may share a commission with a financial planner who is a member of a professional body with whom the Autorité has an agreement, as long as this professional body also allows it.

Before sharing a commission with an authorized person working in another field, the person sharing it must verify with the appropriate authorities to ensure that the sharing adheres to rules applicable to this field.

An advisor registered with the Autorité may request in writing to the payer (e.g., the insurer) to pay part of their commission directly to an authorized person because a sharing agreement exists, such as a mention on the insurance application. In this case, the commission is still considered received by the firm, independent partnership, or independent representative (advisor), and subsequently paid to the third party. This constitutes commission sharing that must therefore be entered into the commission record.

A person registered with the Autorité may request in writing to the payer to pay part of their commission directly to a third party that is not an advisor to give them a gift or to repay them for a debt. This person must be able to prove the authenticity of the gift or the expense they requested the third party to pay for them. They must also indicate in the record the total amounts to which they are entitled for selling financial products and services, and not only the amount of the gift or debt repayment.

The firm, independent partnership, and independent representative (advisor) must include all commission sharing in a commission record.

For each commission, the record must indicate:

  • the contract number or the client name
  • the name of the client, the insurer, or any other person who paid a commission to the firm, independent representative (advisor), or independent partnership
  • the statement number for each commission or compensation received by the firm, independent representative (advisor) or independent partnership

The following information must be entered into the record when a commission is shared:

  • the names of the people sharing it, their business addresses, and the sectors for which they are registered with the AMF, if applicable
  • the names of people who are party to the transaction, and the purpose and date of the transaction
  • the percentage of the commission or flat amount resulting from the transaction, and method of dividing the commission between the people sharing it

For more information, see section File management.

Prohibited actions

A commission portion cannot be paid in cash.

An advisor cannot:

  • directly or indirectly compensate a person working as an advisor without the right to do so
  • accept compensation from a person attempting to act as an advisor through them without the right to do so
  • receive, or sign an agreement to receive, compensation from a person other than the person who retained their services, unless otherwise permitted
  • promise or pay any form of compensation for their services to be retained