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Intermediaries and independent wealth advisers

Whether you are a broker, a wholesale broker, an agent or an (CGP), your status determines who you act for, how you are paid and who answers for your faults.

Independent wealth adviser (CGP)An independent professional who advises clients on their wealth and who distributes, among other things, life insurance contracts as an intermediary. In French: conseiller en gestion de patrimoine (CGP).

Since 1 April 2022, a broker or its agent cannot register with ORIAS (the French register of insurance intermediaries) without joining a professional association approved by the (the French prudential supervision and resolution authority); the ACPR continues to supervise your practices.

ACPRAutorité de contrôle prudentiel et de résolution: the French authority, attached to the Banque de France, that authorises and supervises banks and insurers and oversees the protection of their customers.

Your questions

We are independent wealth advisers. In what capacity do we present a life insurance contract?

You present a contract under your insurance registration with ORIAS, as a broker or an agent. Your status as a financial investment adviser (conseiller en investissements financiers, CIF), supervised by the (the French financial markets authority), covers advice on financial investments, under its own rules. Choosing between broking and agency has its own effects: a broker in principle represents its client, an agent its principal. Your engagement letter should state in what capacity you act.

AMFAutorité des marchés financiers: the French regulator of financial markets and financial products, whose remit covers in particular the instruments offered as unit-linked funds.
Life insuranceA contract under which an insurer undertakes to pay a lump sum or an annuity, at the end of the agreed term or on the death of the insured person, in return for premiums. In France, it is also widely used as a savings and wealth transfer vehicle.

Can we receive commissions on the contracts we advise on?

Yes. The (IDD) does not ban commissions in insurance, but it requires you to tell the client, before the contract is concluded, the nature of your remuneration, and it prohibits any remuneration that would lead you away from the client’s interest. For unit-linked contracts, retrocessions linked to investment management must also be disclosed to the client. For independent advice given under CIF status, retrocessions on financial investments follow other rules.

Insurance Distribution Directive (IDD)Directive (EU) 2016/97 on insurance distribution, transposed in France in 2018. It governs the information, advice and remuneration of distributors. In French: directive sur la distribution d’assurances (DDA).

We distribute through a wholesale broker. Who does what for the client?

Whatever your agreements say, provided they say it precisely: delivery of pre-contractual information, collection of demands and needs, advice, checks, transmission of documents, sharing of commissions. The client, for their part, will turn against whoever advised them. Without a written and verifiable allocation, each link in the chain may be blamed for a task it thought someone else was handling.

AML/CFTAnti-money laundering and countering the financing of terrorism: the obligations of due diligence, customer knowledge and reporting to Tracfin (the French financial intelligence unit) that apply to insurers and intermediaries. In French: LCB-FT.

An insurer is terminating our agreement. What happens to our commissions on in-force contracts?

The agreement answers first: notice period, how long commission remains payable after termination, who takes over administration, what happens to upfront commissions. If it is silent or ambiguous, the dispute will turn on your status, the length of the relationship and the circumstances of the termination. At the same time, review the clauses that claw back your commissions if the client surrenders early or exercises the (renonciation).

Right of cancellation (renonciation)The right of the holder of a life insurance or capitalisation contract to withdraw from it within thirty days of being informed that it has been concluded. If the information documents required by law were not provided, this period is extended, for a holder acting in good faith, up to a limit of eight years.

One of our agents has misappropriated client money. What should we do first?

Preserve the evidence and measure your exposure (clients, contracts, flows of money, signed documents), then notify the claim to your professional indemnity insurer, alert the insurers concerned and prepare the criminal complaint. As principal, you are civilly liable for the faults your agent commits in performing the mandate: the clients who suffered losses will turn to you.

A client blames us for losses on their unit-linked funds. Are we liable?

Not merely because values fell, provided the information you gave stated clearly that a carries no capital guarantee. The debate will turn on your advice: did the contract and the investment options offered match the demands, needs and profile you recorded, and does the subscription file show it?

Unit-linked fundA life insurance investment option linked to financial assets (funds, securities): the value of the contract follows the value of these assets, with no capital guarantee from the insurer.
  1. 01

    Design

    We write the agreements that set your place and your remuneration in the distribution chain.

    • Choosing or combining statuses: broker, agent, financial investment adviser
    • Agreements with insurers, wholesale brokers and your own sub-brokers
    • Written allocation of tasks along the chain: information, advice, documents, AML/CFT due diligence
    • Remuneration clauses: upfront commissions, clawbacks, commissions after termination
    • Online subscription journeys
  2. 02

    Steer

    We bring your organisation into line with the IDD, then keep it up to date.

    • Templates for recording needs and giving written advice, by contract family
    • Disclosing your remuneration to clients and managing conflicts of interest
    • AML/CFT questionnaires and checks required by insurers
    • Oversight of your agents and of delegated tasks
    • Legal audit before your firm is sold or merged
  3. 03

    Defend

    We defend you against your clients, your business partners and the authorities.

    • Client complaints after a loss or a disputed switch
    • Commission disputes along the chain: upfront commissions, clawbacks, retrocessions
    • Misappropriation by an agent: criminal complaint, clients who suffered losses, liability insurer
    • Introducers or business partners not authorised to present contracts
    • ACPR inspection of your firm and disciplinary follow-up

See also