Insurance commissions and conflicts of interest: a reminder for firms

RICS has been asked about firms referring clients to insurance providers or brokers. In these cases, firms may receive commission or other financial benefits in return. These arrangements are allowed if properly managed and disclosed. But they can create conflicts of interest. This is because financial incentives might affect, or appear to affect, professional judgement.

The RICS Rules of Conduct and the Conflicts of Interest Professional Statement set out clear guidance. Firms should consider whether any financial interest may give rise to a possible conflict. This includes commissions, referral fees, or incentives. Where a conflict exists, firms must manage and disclose it properly. Advice should stay objective and put the client's interests first. Firms must also get informed client consent where needed.

Firms carrying out insurance-related work must meet relevant regulatory requirements too. This includes FCA authorisation rules. Where it applies, it also includes RICS Designated Professional Body (DPB) arrangements. Firms should have the right systems and controls in place. These should keep things transparent and put clients' interests first.