posted 9th February 2026
Much debate has been taking place about commission pricing structures as we await the publication of the FCA’s Pure Protection Market Study interim report.
However, I believe one of the biggest risk firms face is that of chasing income today, through hiring advisers ‘with their own clients’, without sound due diligence. If a firm doesn’t fully understand the long-term risk a rogue protection adviser can make to the business, then they don’t put in place adequate measures to protect themselves from future harm. By ‘measures’ I mean managing the commission structures in place to pay advisers alongside making sure they have contractual clauses preventing the churning of cases if an adviser moves firms.
While most commentary by industry experts appears to focus on the commission structures in the market, i.e. ‘loaded premiums’ the real problem is not being addressed or even recognised.
Having a business model that solely focuses on outdoing your competitors on commission payments is a race to the bottom.
The real issue is understanding how clawbacks roll up over a 4-year period and the impact that has on the way an adviser earns (and owes) money.
Firms, and networks, for that matter, just don't seem to realise that by not withholding some of their new business income and placing it in a clawback pot from day 1, they run the risk of advisers leaving, to start again elsewhere, churning their client-base and leaving the firm with their clawback liability.
How are we tackling the brokers who build a career out of job hopping and churning business?
When advisers move firm, they basically have a clean slate, starting again in another firm with no old lapses to worry about. They earn 100% of the new business commission, over 4 years, in their new firm. Whereas the old firm needs to earn the equivalent of 120% of the original first-year earnings to cover off 4 years of indemnity commission exposure.
The providers are paying out a ‘commission loan’ based on the understanding the policy will still be in force in 4 years’ time.
Advisers moving companies and churning policies is, in my view, the biggest blight on our industry. This isn’t to say we don’t have exceptional, gifted advisers, with a strong moral compass, in our industry. However, rogue advisers have the power to bring down an unsuspecting firm by causing untold damage. Less scrupulous advisers move agencies and firms for no other reason than to earn the commission all over again elsewhere.
Firms appear to be turning a blind eye to this practice just to increase their own profitability. If business starts being written at high levels overnight, then it basically is too good to be true. What’s more, it’s naïve to assume the adviser will not do the same to them 3 years down the line as they did with their previous firm. Are Firms too embarrassed to admit they’ve been had? I don’t know. What I do know is while self-employed advisers are not held accountable for their actions nothing will change.
Let’s call this bad practice out and focus on supporting the 80% of advisers who are a credit to our industry, while removing any route to market for the rogues amongst us. Let’s champion the idea of an industry standard contract that every self-employed adviser must adhere to, that is enforceable within FCA guidelines.
No adviser should be able to benefit financially from bouncing from one firm to another just to churn policies. Until providers are much more transparent about the sharing of advisers’ business quality data and keep track of individual lapse rates, rather than presenting lapses at firm-level, this practice will continue.
What’s being done to track down stolen databases that end up in call centres? The practice of re-broking kills the net income of the firms where the policies were originally sold.
The evidence is all there but nothing will change until providers find a way to identify, and stop accepting, churned business from stolen databases. If firms and networks stop chasing that ‘quick fix’ cash injection, then there literally is nowhere for rogue advisers to hide. The FCA, too, have a part to play and must surely see that individual registration of protection advisers is the only way forward.
I understand, from off-the-record conversations, that it’s somewhat easier for providers to manage the possibility of clawback and churn from poor business practices ‘at some point in the future’ than it is to get investment into better MI and monitoring today.
At Auxilium, we do our best to restrict the practice of ‘burn and churn’ by offering to vet advisers before a firm employs them. We also advise member firms not to apply for agency numbers for advisers who don’t meet our due diligence checks. However, there is only so much we can do if a provider has an automatic registration process or is willing to offer agencies regardless of feedback. Firms who don’t complete proper due diligence when hiring should be held to account too. Turning a blind eye to gaps in CVs or the supply of a recent reference just because you can see pound signs sitting in front of you makes you culpable if that adviser churns business. And let’s not even talk about what impact churning purely for commission has on clients. Is it really in their best interests to cancel that policy and write the same thing with another provider?
So, my advice is to stop focussing on the different commission payment structures in the market and get a grip of the serial offenders, those advisers that bounce around the industry, avoiding paying back the “loaned” commission and who are leaving their old firms to pick up the tab.
So much time is spent on working out a firm’s lapse rate but how much time is spent on looking for ways to weed out the rogues and prevent them from setting up camp elsewhere?
I doubt any firm, with loyal advisers, has an organic lapse rate of higher than 5%.
If providers want to improve the quality of their book they need to be more rigorous in checking the employment history of advisers. And firms need to be held to account if they don’t give references to potential new employers on a timely basis. I might even go as far as to say that if they don’t disclose high lapses and poor performance, that they should be responsible for compensating the hiring firm!
Any adviser leaving a firm with a high individual lapse rate should only be able to earn commission on a non-indemnity basis. And to finish, dare I say that there should be a regulatory requirement to expose rogues? That would solve the problem overnight.
This article was published in Mortgage Solutions 2nd February 2026=https://www.mortgagesolutions.co.uk/better-business/business-skills/2026/02/02/more-must-be-done-to-tackle-job-hopping-protection-advisers-who-cancel-and-rebroke-policies-graves/
Industry expert, Mike Pritchard, Chair of Elixir, offered his thoughts: He asks, “Is there a more effective way of tracking advisers to reduce this problem? If advisers moving from firms and specifically those advisers (that create the chaos) are also enabling their previous firm to fail through accelerated lapse and clawback risk; then a better way to track these “movers” and prevent the chaos, is required. Insurers can only do so much alone but, if the “at risk” firms, that see advisers move, can make the insurer aware early, insurers are able to coordinate and track movements and – importantly – understand any associated rebroke risks.
Even more critically, having FCA allocated IRN’s (Individual Registration Numbers) that move with the adviser and being the only recognised identifier to trade in the Protection (or wider) space; this could help to assuage the issue raised, more successfully. A system based on traceable advisers (eg. IRN’s), who are proud to be part of this industry, and have nothing to hide or cause distress when moving, has to be a better way forward?”
And was Mortgage Solutions' Star Letter, 6th February 2026
