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Insurance And Financial Planning

Requirements to receive compensation

Only an advisor who meets the following conditions is authorized to receive compensation for distributing financial products or services.

The advisor must be authorized to practise by the Autorité—that is, they must:

  • hold a certificate issued by the Autorité to act or present themselves as a representative (advisor)
  • conduct business in one of the three permitted modes, which are:
    • working for one or more firms as an attached representative (advisor)
    • working for an independent partnership as an associate or employee, or
    • working as an independent representative (advisor)
  • The advisor must sell the product or offer the service themselves
  • If they work for a firm or independent partnership, the advisor must receive their compensation through this firm or independent partnership

When an advisor already receives compensation for selling a product or providing a service, such as a commission, and wants to also charge their client emoluments, fees, or other forms of compensation for selling this same product or providing this service, they must disclose this fact to their client.

Information To Disclose

In this case, the advisor must disclose the following information to their client in writing before or when providing their services:

  • amounts charged to the client
  • the fact that they receive other compensation, such as commission, shared commissions or any other benefit for which they are eligible for products they sell to the client or the services they provide to them
  • the name of the person sharing, if this commission or other form of compensation is shared with another person

In the event that the compensation method for a product sold or service provided to a client changes, the advisor must also disclose this change to the client upon the first written communication with them after the change has entered into effect.

The advisor cannot:

  • grant a discount to clients
  • directly or indirectly compensate a person who doesn’t have the right to act as an advisor
  • accept compensation from a person acting or falsely attempting to act as a representative (advisor) through a representative (advisor) authorized to practise
  • receive, or sign an agreement to receive, compensation from a person other than the person who retained their services
  • promise or pay any form of compensation for their services to be retained
  • start commission sharing outside of the permissible limits

A financial planner must not:

  • directly or indirectly compensate a person who is not legally qualified to hold the title of financial planner for them to act in this role or take on the title

    Therefore, a financial planner may not compensate a person who cannot hold the title of financial planner for financial planning services.

  • accept or receive direct or indirect compensation from a person who is not legally qualified to hold the title of financial planner who is working or attempting to work under this title

    For financial planners who do not hold a certificate from the Autorité but are members of a professional body with an agreement with the Autorité, they are legally authorized to hold this title and may therefore receive or provide such compensation, as applicable.