Almost one-in-five of the brokers who sought to become authorised advisers under a new system of regulation have withdrawn their applications, it has emerged. The Central Bank said 50 brokers had cancelled their applications in the last six weeks, bringing to 150 the number of firms that applied but failed to be authorised.
Some 800 firms sought the recognition, meaning that 650 will receive the full authorisation.
But while the Central Bank expected to have authorised all the firms by the end of this month, a spokesman said an additional 150 cases would remain outstanding for the next eight weeks or so.
He said: "With a small number of them, there would be concerns that we would like to see addressed before authorisation. There are some outstanding issues which require further information gathering."
Firms that receive authorised adviser status are entitled to provide advice on the entire investment and insurance market.
The Central Bank assumed responsibility for the regulation and supervision of insurance intermediaries more than a year ago.
But despite its objective of providing greater consumer protection, there are fears that the new system will lead to higher prices.
A report earlier this month said life assurance customers faced significant price hikes under the new system. Based on a survey and interviews with 200 industry figures, accounting firm Cooney Carey said a "significant" part of brokers' income would now have to be earned from client fees rather than commission from insurance companies.
This was in contrast with the current situation where more than 80 per cent of brokers derived 80 per cent of their income from commissions.
About 1,700 restricted intermediaries will be registered under the new regime.
Under a new element of the regulation recently introduced, most of those will be allowed to provide advice about products sold by a number of companies specified in their registration.
The activities of the remaining 150 will be confined to advising about products sold by only one company.
In all, the Central Bank expects to register about 2,350 companies. That amounts amount to less than a third of the 9,000 mooted when the Department of Enterprise, Trade and Employment was transferring responsibility to supervise the sector to the Central Bank.
The Bank itself initiated correspondence with 6,000 firms, indicating that more than half had either ceased to trade or decided against pursuing formal registration.
