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Loaded premiums have "all the hallmarks of a future mis-selling scandal"

ended 15. May 2025

Loaded premiums could be the next big mis-selling scandal, one broker, Rob Peters of Simple Fast Mortgage, has claimed. As things stand today, two consumers taking out the same policy at the same time on the same day could be paying different amounts — one higher than the other because their premiums are loaded to pay out more commission.

In March, and as part of a wider market study of the protection market, The FCA announced it would be looking into whether premiums are being raised by insurers to pay a higher commission to an intermediary. But the CEO of one network says the FCA needs to look at the issue with more urgency.

Daniel Hobbs, CEO at New Leaf Distribution, said: “Consumer duty simply isn’t working in the protection market as long as this practice is allowed to continue. It’s ridiculous that just because a client goes to a certain broker they could end up paying 10%-15% more per month. Over the course of a product life that could be thousands of pounds more than a true whole of market adviser. The FCA needs to review and level the playing field, and fast.”

Another broker, Mark Hosker of Cyborg Finance, warned: “Compliance teams still signing off this practice must be knowingly taking risks, especially post-ConsumerDuty review. I look forward to their judgment day. It's a matter of time until Martin Lewis and team are bored and push this.” Views below.

5 responses from the Newspage community

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Editor
Rob Peters
Principal at Simple Fast Mortgage
This has all the hallmarks of a future mis-selling scandal. If two identical customers pay different prices for the same cover, purely because one has chosen to load the premium for more commission, it’s hard to justify that ethically—or in the eyes of the regulator.
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Daniel Hobbs
CEO at New Leaf Distribution
Consumer duty simply isn’t working in the protection market as long as this practice is allowed to continue. It’s ridiculous that just because a client goes to a certain broker they could end up paying 10%-15% more per month. Over the course of a product life that could be thousands of pounds more than a true whole of market adviser. The FCA needs to review and level the playing field, and fast.
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Martin Briggs
Independent Financial Adviser at The Retirement Studio
Unfortunately, when there’s a lack of strong oversight in areas like protection, it does leave room for adviser loading and other unethical practices. It’s not fair on consumers, especially when two people can end up paying different premiums for the same cover simply due to commission structures. This is definitely something that needs closer scrutiny, and I hope the FCA addresses it sooner rather than later. Clearer guidance and tighter regulation would help ensure clients are always getting fair and transparent advice.
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Mark Hosker
Mortgage Adviser at Cyborg Finance
Once, Loaded Premiums flew under the radar for advisers, but recent media coverage shows firms were warned. Compliance teams still signing off this practice must be knowingly taking risks, especially post-consumer duty review. I look forward to their judgment day, it's a matter of time until Martin Lewis & team are bored and push this.

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Hannah Bashford
Director at Model Financial Solutions
There is no way to justify loaded premiums except for the purpose of more profit. There’s no more work involved for someone loading a premium than not. I’m glad the FCA is currently reviewing insurance sales as this sort of practice is what gives the industry a bad name and destroys consumer trust.