Commission on insurance policies
For life cover, disability, dread disease and short-term insurance, the broker is paid a commission by the insurer out of the premium. You do not pay the broker separately.
Commission levels on insurance are capped by regulation, and the amount must be shown in your policy documents and quotes. Because the premium is set by the insurer, using a broker generally does not make your cover more expensive than buying it yourself.
Insurer or independent broker?
Buying life cover directly from an insurer means you only see that insurer's products and pricing, and the consultant works for them. An independent broker compares several insurers, checks that the cover fits your needs, and helps at claim time, usually for the same premium.
See the benefits of using an independent broker for more.
Advice fees on investments
For investments, the broker's fee is agreed with you. There is usually an initial advice fee when you invest and an ongoing advice fee for annual reviews, both normally a percentage of the investment value. These fees are separate from the platform fee and the fund manager's fees.
Conflicts of interest
Authorised financial services providers must identify and manage any conflict of interest, including incentives from product providers, and must have a written conflict of interest policy. You can read ours: Conflict of Interest Management Policy and Disclosures of Statutory Information.
Questions to ask your broker
- How are you paid on this policy or investment, and how much?
- Would the premium be different if I bought it directly?
- What ongoing fees will I pay each year, in rands?
- Do you receive any other benefits from this provider?
Frequently asked questions.
Is it better to get life cover through an insurer or an independent broker?
Usually an independent broker. The premium is generally the same, but a broker compares several insurers, sizes the cover to your needs and helps with claims, while a direct insurer only offers its own products.
Do I pay a broker fee on my insurance policy?
Not separately. The broker's commission is paid by the insurer out of the premium, is capped by regulation, and is disclosed in your policy documents.
How much does an investment broker charge?
Investment advice fees are agreed with you upfront, usually as an initial fee and an ongoing annual fee based on a percentage of your investment. They must be disclosed before you invest.
Can I negotiate my broker's fees?
Advice fees on investments can usually be negotiated. Insurance commission is set within regulated limits and paid by the insurer.