Key figures within the international financial services industry have reacted to the publication of the Isle of Man Financial Services Authority Conduct of Business (Long Term Business) Code that, among other factors, affects commission disclosure for financial advisers, has been released today.
As was first reported earlier today, the publication of the IOMFSA Conduct of Business Code will, among other changes, see life companies based on the island disclosing more detail on how it pays – and importantly how much – commisson it gives to advisers when transacting client business.
Karen Badgerow, pictured left, chief executive of the Isle of Man Financial Services Authority called the launch “a major milestone” in the development of the Island’s regulatory framework for long term business, which “will enhance the protection afforded to policyholders of the Island’s life insurers in line with the Authority’s regulatory objectives, in a manner that is consistent with international standards.
“We are extremely grateful to the industry for the way in which it has engaged with us during the development of the Code and look forward to further productive collaboration during 2019 and beyond,” she said.
The move by the Isle of Man FSA, which is similar to those being implemented across most of the other key international financial services centres – including Dubai – is part of a changing global backdrop to international cross-border (or offshore) financial services.
Sean Christian, MD & Executive Director for Canada Life’s International Businesses, pictured below left, commented: “We are delighted to see the IOM Conduct of Business Code being published after a number of years of the industry and regulator working collaboratively together in developing a set of new regulation that truly ensures the customer’s interests are at the heart of IOM licence holders’ businesses.
“For those companies used to distributing their products in the UK market there is little in the Code that is actually new. The Code very much replicates the UK Treating Customers Fairly regime and in parts mirrors some of the outcomes brought about under the UK Retail Distribution Review in 2013.
“The Code sets down a clear marker of intent that the Isle of Man is playing a significant and vital role in driving international standards around customer protection and product transparency.”
Peter Kenny, pictured below left, CEO of Old Mutual International, part of Quilter, said:
“This change has been a long time coming. It is the culmination of a three year process during which the Isle of Man’s regulatory authorities have been very understanding to ensure everyone can implement in a timely manner, and the further transitional period reflects this. Many of the advisers I speak to have adapted their businesses and are ready.
“We have always maintained that the new rules are good thing. They allow for greater transparency, customer confidence and they serve to keep the Isle of Man at the leading edge of improving professionalism in our industry. Those that embrace it will do well in the long run.
“Commission disclosure has to be the right move for the industry in terms of driving better customer outcomes. It is coming in most developed markets in one form or another. While it will take time for this to feed through into all jurisdictions, there is only one direction of travel and the sooner businesses adapt, the better positioned they will be.”
David Kneeshaw, pictured left, chief executive of RL360, also welcomed the move.
“The IOMFSA announcement today is welcome news,” he said. “The new guidelines will benefit the stronger and better advisers, encourage investment in better quality retail funds, and provide more transparency and protection to consumers. The Isle of Man has set the benchmark for other ‘offshore’ jurisdictions to follow.”
The Manx Insurance Association (MIA) also told International Investment that it “welcomes” the publication of the (Conduct of Business) (Long Term Business) Code 2018.
Gill Marples, also pictured left, chair of the MIA said: “The MIA has engaged with the IOMFSA during the consultation period particularly with regards to the phased implementation of Code requirements which will allow industry to finalise development work in some areas.
“The Association supports the development of a customer focused regulatory framework which meets relevant international standards.”
Click on this link view the full publication of the IOMFSA Conduct of Business Code.