What price the value of expert advice?

It was a a tumultuous month for premium finance. The FCA Market Review started it, and the commission disclosure confusion ended it. The size of potential compensation (if any) will hang over the industry for several months to come, let alone the operational and process changes required to comply with any new requirements.

Despite this, tifco made great progress for several clients and it is was another month that reinforced the value skilled persons and subject matter experts.

At tifco this was laid bare in our tale of two brokers.

Broker A and Broker B had seen Premium Finance rates rise rapidly over the last 3 years, impacting their customer rate and/or earnings. Being loyal to their provider, they were also unaware of the product offerings of other lenders. Our reviews found that both their services and commercial terms could be improved.

Broker A headed straight to their existing current provider without our help. Proudly securing a 1% reduction in rate because we said they were being overcharged and by not using us saving themselves around £15k in success fees.

Brokers B – had already received an offer of a 1.0% improvement in rate but asked us to review it anyway. We secured more than 2% reduction in rate and a vast improvement in the technology, services and support for them and their customers.

Broker A saved £15k and is now stuck in a long-term contract where he and his customers are paying more than £200k more than they needed to over the new contract, but hey, he saved £15k!

Even after Broker B paid his success fee, he is more than £500k better off over his new contract with improved services and customer support.

As my wife often reminds me – you can have a go at DIY, but it won’t be as good as getting a plumber in.

#insurancepremiumfinance #Insurance #IPF #Brokers #BIBA #ConsumerDuty