The tricky thing about commission is that it rarely looks like a payment. There is no invoice with your name on it, so it is easy to assume nobody was paid at all.
Commission is payment linked to arranging or maintaining certain financial products. Depending on the product and the rules, it may be paid by the provider, reflected in the product's pricing, or recovered through premiums or charges. You may never receive a separate bill, but the payment should still be disclosed to you.
None of which makes commission evidence of poor advice. Advisors do real work and must be paid for it. The question is whether the amount, the timing and the possible influence are visible. A payment made upfront creates a different incentive from one that continues only while the service continues. Replacing one product with another may also generate new remuneration, which is exactly why replacement comparisons deserve a careful look.
So do not stop at “the provider pays”. Ask for the expected rand amount, who receives it, what service it covers, and whether a different choice would pay differently.
Try this now
Find the commission disclosure for one insurance or investment product. Record the initial amount, the ongoing amount, the recipient and the related service. If you only find a percentage, ask for a rand illustration.
Ask your advisor
- How much commission will be paid, by whom and when?
- Would your remuneration change if I chose another option or kept what I have?
- What ongoing service is connected to any ongoing payment?
Visibility allows a fair conversation without assuming misconduct.