The Competition Authority's report on the non-life insurance market has spurred a fresh round of "broker bashing", highlighting escalated commission values, potential conflicts of interest and "lack of transparency" on the incentives brokers receive from insurers, writes Laura Slattery

Associations representing brokers have branded the preliminary report narrow, unbalanced and erroneous.

Nevertheless, the Competition Authority's findings should prompt bargain-seeking consumers to wonder: what exactly is the best way to obtain independent financial advice without being ripped off and/or misled by a commission-hungry broker?

First of all, consumers should remember there are rules and regulations in place to protect them from "independent" financial advisers who are not as independent as they claim. In many areas brokers are more heavily regulated than banks and insurers.

The Irish Financial Services Regulatory Authority (IFSRA) is also in the middle of a major review of all existing codes of practices for financial services firms. In the meantime, however, here are five steps consumers should take before they accept the financial advice they receive at face value.

Check that the person advising you on your finances is qualified

The very least consumers should look for from anyone trying to advise them on a financial product is the letters "QFA" after their name, according to Mr Paul O'Neill, a life assurance and mortgage intermediary.

QFA stands for qualified financial adviser. Over the next few years it is expected to become pretty much mandatory for everyone advising the public on financial products, including tied agents and direct sales staff.

Tied agents and direct sales representatives give consumers an obvious sales pitch for one bank or insurance company alone.

Most consumers will be sceptical enough to know that the agent is being selective in the facts they use to talk up their version of a particular product, for example a personal pension.

But they may expect the tied agent to have a certain degree of technical knowledge, for example about the tax rules applying to the pension.

More often than not, according to Mr O'Neill, even when complex investment products are introduced, tied agents and direct sales staff are simply given half a day's training in a hotel, then unleashed onto the general public to start chasing sales using a prepared script.

Staff turnover on direct sales forces is high, he says.

But spending a little over a year to obtain the QFA qualification at least "shows that the person is interested in the industry and that they take it seriously enough to go and get it", he adds.

Understand the authorised status of the financial adviser

Financial services firms must be authorised by IFSRA.

A register of regulated firms will shortly be available on www.ifsra.ie, but until then, you can check the authorised status of a financial services firm by ringing IFSRA's lo-call telephone line at 1890-200-469.

Generally speaking, brokers who are not tied agents can be split into two categories: multi-agency intermediaries and authorised advisers. An authorised adviser must be willing to advise clients on all products available on the entire investment and insurance market.

This is important because some financial services companies, including insurers Quinn Life and Ark Life, An Post subsidiary One Direct and EBS Building Society do not sell through brokers, although EBS is expected to make its products available through intermediaries soon.

Because an authorised adviser will not receive any commission from these companies if they conclude that their product is the most suitable for a particular client, they may charge a flat fee in lieu.

It is more common, however, for a broker to be authorised as a multi-agency intermediary.

This means the broker can only provide advice and sell the products of companies with which they have written agencies.

Ask brokers which companies they act for and how much commission they receive from each

Multi-agency intermediaries may only have written agencies with a handful of insurance companies or lenders.

Thus the independence of their financial advice and their ability to shop the market on your behalf may be severely limited.

Another financial institution might be offering much better value-for-money on the product you are looking for, but you may never find this out because the broker will not recommend it.

Some brokers may have agency agreements with almost the full range of financial services firms - they may indeed be authorised advisers - yet direct a large volume of their business in the direction of one lender or insurance company.

This might be because that lender or insurer is offering by far the best or cheapest product in the market. But in some cases, it might be because that company pays the broker higher percentages of commission than its competitors.

IFSRA's codes of practice require that brokers state the companies for which they act as an agent and details of the commissions they receive in the terms of business letter they must give to clients.

If your broker does not furnish you with this information and refuses to give it to you at your request, it is possible that he or she is not as interested in giving you "best advice" as they are in creaming the most from the commissions on offer.

Investigate if the broker will agree to be paid on a fee basis

Most brokers earn a living from the commissions paid by financial institutions and insurance companies.

This means that it is possible for consumers to receive financial advice without having to pay for it upfront.

But if you are not confident that your broker is professional and honest enough to disregard commission rates when recommending products, you may prefer to pay an upfront fee.

Some brokers will agree to refund any commission they have received to the client in exchange for a negotiated fee.

This may work out cheaper in the long term on high-value transactions, but more expensive for a consumer investing low sums.

But charging fees increases transparency, according to the Competition Authority, and clearly distinguishes the price of the brokers' service from the price of the insurance itself.

Do your own research

According to Mr Paul Lynch, chief executive of the Irish Brokers' Association, the Competition Authority failed to acknowledge brokers' role in negotiating bargains for clients.

There's certainly no harm in using the services of a broker to source quotes or mortgage approvals from the range of companies with which he or she holds agencies and then ringing around the rest of the market just to double check that you are getting the best deal.

For example, this might mean asking a broker to obtain the cheapest motor insurance premium, then ringing Quinn Life yourself to see if it can come up with anything better.

It might also help to compare the cost of your broker's recommendation with the special "execution-only" deals on offer from time to time from discount brokers.

Even after you have taken out a financial product sourced by a broker, it is probably not a good idea to sit back and assume that your financial affairs will take care of themselves from there on in.

Reviewing your financial affairs regularly can mean making a new round of phone calls whenever you receive an insurance policy renewal notice, upping your pension contributions or even remortgaging.

The more complicated your financial affairs, the more likely it is that you will benefit from the services of a reputable broker.