CIPR 3.5.12 Firms' obligations in relation to trail commissions

(1) If an authorised firm receives a trail commission arising from a regulated activity, the firm must provide an ongoing service to the customer concerned.
(2) The firm must have systems and controls to ensure that the service is provided to every relevant customer.
(3) The firm must document and retain evidence that it has provided the service.
(4) The firm must not seek or receive additional remuneration for the service.
(5) The obligations imposed by this rule apply in relation to a trail commission that the firm continues to receive that arose from a service that the firm provided before these rules commenced.

Note These rules commenced on 1 January 2020 — see rule 1.1.2.

Guidance

A trail commission is a fee regularly paid to an authorised firm over the lifetime of a financial product such as a long-term insurance policy or a packaged investment product. The ongoing service that an authorised firm provides should be sufficient for the firm to be satisfied that the product or advice that it provided remains suitable for the customer.
Derived from QFCRA RM/2019-2 (as from 1st January 2020).