ICOBS 4.6 Commission disclosure for pure protection contracts sold with retail investment products


1The rules in this section:

  1. (1)

    address the risk that a consumer believes that a firm's remuneration for its pure protection service is included in its adviser charge, where this is not the case; and

  2. (2)

    enable the consumer to evaluate a firm's adviser charge in the light of any additional remuneration received by the firm for the pure protection service it provides.


A firm which agrees an adviser charge with a consumer and provides an associated pure protection service to that consumer must:

  1. (1)

    in good time before the provision of its services, take reasonable steps to ensure that the consumer understands:

    1. (a)

      how the firm is remunerated for its pure protection service; and

    2. (b)

      if applicable, that the firm will receive commission in relation to its pure protection service in addition to the firm's adviser charge;

  2. (2)

    as close as practicable to the time that it makes the personal recommendation or arranges the sale of the pure protection contract, comply with the following disclosure requirements, substituting pure protection contract for references to packaged product:

    1. (a)

      COBS 6.4.3 R, or COBS 6.4.4A R and COBS 6.4.4B R; and

    2. (b)

      COBS 6.4.5 R.


A pure protection service is unlikely to be associated with an adviser charge for the purposes of ICOBS 4.6.2 R if the firm agreed the adviser charge with the consumer 12 months or more before the provision of the pure protection service.


A pure protection service is not associated with an adviser charge for the purposes of ICOBS 4.6.2 R if the adviser charge is agreed with the consumer by a firm or an appointed representative and the pure protection service is provided to that consumer by another firm or appointed representative. However, if a firm or an appointed representative refers a consumer with whom it is agreeing an adviser charge to another firm or appointed representative for the provision of a pure protection service, it should consider its obligation to communicate with the consumer in a way that is clear, fair and not misleading in the context of the guidance in ICOBS 4.6.1 G.


If a firm expects to provide, or provides, information about its adviser charge orally, it must also provide the information required by ICOBS 4.6.2R (1)(a) and ICOBS 4.6.2R (1)(b) orally.