Remuneration transparency
Remuneration transparency is the obligation on a broker to disclose to their client, before any brokerage transaction is finalized, the nature and amount — or calculation method — of any remuneration received from lenders or insurance companies. The rule aims to allow the client to assess the recommendation received with full objectivity.
Key points
- Disclosure must occur prior to providing the service, not after signing.
- The broker may state a precise amount or a range if the exact figure is not yet known.
- Transparency covers both direct commissions and non-monetary benefits (free training, tool access).
- It applies in mortgage credit (MCD directive, transposed into French law) and insurance (IDD).
- If the client requests it, the broker must provide further details on their sources of remuneration.
Frequently asked questions
How must a broker communicate their remuneration to the client?
The disclosure must be written, clear, and legible, typically included in the engagement letter or a pre-contractual information document. It must specify whether the broker is remunerated by the client, by partners, or by both. In mortgage lending, this information often appears in the ESIS (European Standardized Information Sheet) completed by the lender.
Why has this obligation been tightened in recent years?
The EU MCD directive (2014, mortgage credit) and IDD (2016, insurance) harmonized transparency requirements across the single market after finding that remuneration opacity created an information asymmetry that disadvantaged consumers. In France, these rules layer on top of the Consumer Code and Insurance Code, making the framework particularly comprehensive.
Does remuneration transparency apply only to brokers?
No. The obligation extends to all credit and insurance intermediaries, whether independent brokers, bank agents, general agents, or online comparison platforms. The scope covers all distribution of financial or insurance products for remuneration, provided the professional acts as an intermediary between the client and the product provider.
In practice
At the first meeting with a purchasing couple, a broker hands them an engagement letter stating that the broker will be remunerated by the selected lender in the form of a 1% commission on the borrowed capital, with no fees charged to the clients. This document, signed in duplicate, constitutes proof of the disclosure required by regulation.
Official sources
- Article R519-26 CMF (written agreement on fees and remuneration) · Légifrance
- Article L519-1 of the Monetary and Financial Code · Légifrance
- Prudential supervision and resolution authority · ACPR (Banque de France)