New IDD rules 2016 will have a big impact on IFAs working in the EU who in the past have worked under IMD. IMD has been updated to IMD 2 which has been renamed IDD: Insurance Distribution Directive with new IDD rules 2016 .
OpesFidelio network members will have to work to the new IDD rules 2016 with immediate effect and OpesFidelio will provide support to achieve such matters as the correct recording of Continuous Professional Development (CPD).
Key points of new rules:
The two principles of new IDD rules 2016 are something all responsible IFAs work towards already;
“Always act honestly, fairly and professionally in accordance with the best interests of customers”
“All information must be fair, clear and not misleading”
Let’s look at the main points of new IDD rules 2016:
- Intermediaries cannot pay employees on performance if that conflicts with the best interests.
- Before a product sale is completed, a full explanation of the need for the product must be provided to the client as well as the basis (i.e. method of calculation ) of commissions/remuneration for the adviser.
- A product information document, or key features document, must be given to clients
- Firms must evidence at least 15 hours of CPD per year.
- Bundling- when an insurance product is sold as an investment package, the customer must be informed whether it is possible to buy the components separately. If so, the components and the costs must be evidenced.
Time is short, the new rules were signed off in February 2016 and EU member states have until February 2018 to implement them, at which point IMD (the old regime) will be discontinued.
Don’t wait to be pushed, talk to OpesFidelio about moving your business model to not only comply with new IDD rules 2016 but provide a better service and generate better profits for your business. OpesFidelio will help network members through the transition and confidently provide you with the experience of a fee based environment which is inevitable.
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