Mandatory commission disclosure could spell the death knell for small independent UK brokers, the Institute of Insurance Brokers (IIB) has warned the Financial Services Authority (FSA).

The IIB says its members are concerned that compulsory disclosure would benefit big brokers, direct writers and insurer-owned intermediaries, to the detriment of Britain’s remaining independent brokers.

IIB Head of Technical Services Ann Peel rejects suggestions full disclosure would benefit customers. “Enhanced remuneration arrangements for intermediaries rarely translate into higher overall costs to the customer,” she said.

Forcing brokers to disclose commissions is the most draconian of the three proposals canvassed by the FSA, along with more rigorous supervision and enforcement of existing rules and principles, and an enhanced “on request” regime.

The FSA plans to impose any necessary regulatory changes towards the end of the year.

Meanwhile, the IIB has welcomed the FSA’s parallel investigation into conflicts of interest and the potential blurring of the distinction between insurers and intermediaries.