Life as a mortgage broker can be a strained and testing one, but for many there is often the possibility of a relaxing time to look forward to, courtesy of a grateful lender.

This could be free theatre tickets or even a weekend golfing in the sun.

But new rules coming into force in Ireland this month will scupper such plans for brokers across the water and could herald the death knell for similar arrangements in the UK.

From this month, brokers must clearly disclose to clients all commissions from the bank.

Crucially, Irish regulator the Central Bank is also banning them from accepting ‘freebies’, such as free golf trips or sports tickets.

The regulator warns: “Any commission received in the form of non-monetary benefits must demonstrably enhance the quality of the service to the consumer in order to be permitted.”

And this will be strictly policed, with the regulator employing a range of methods to monitor compliance, including conducting inspections and ordering specific reviews on particular topics.

On the issue of hospitality, a Central Bank spokesperson says: “Non-monetary benefits must enhance the quality of the service to a consumer in order to be deemed acceptable. In general terms, this means that the hospitality provided should be of a reasonable de minimis value and will be considered in the overall context of the meeting/conference/training course to which it is connected.

“Supervisors will evaluate whether the benefit provided could be construed as excessive or whether the benefit provided could be perceived as having the potential to create a conflict of interest.”

The new rules are designed to provide “much-needed” transparency around commission payments generally.

Central Bank director of consumer protection Gráinne McEvoy says: “It is important that consumers are clear about the price they are paying for financial services. We will not allow hospitality such as golf trips and sporting event tickets as we consider such benefits are designed to influence an intermediary to place business with a particular provider rather than to provide any direct benefits to consumers.”

McEvoy suggests that, in some cases, brokers are being paid significant amounts of money to promote a certain provider.

“It is a practice that exists in the industry – what we’re doing here is restricting brokers from taking any form of gift,” she adds.

But Association of Mortgage Intermediaries chief executive Robert Sinclair is of the opinion that UK brokers won’t have to lock away their golf clubs or hang up their Wimbledon sun hats just yet.

“The Irish regulator is playing catch-up to meet EU demands and going down a route that the Financial Conduct Authority has already covered, but has come to a slightly different conclusion and gone a bit further,” he says.

“The UK regulator has already considered this aspect under the incentives as part of RDR to cover investment advisers and IDD for insurance brokers. The Mortgages Market Study reviewed undue influences in the mortgage market regulations conducted in 2018 and reached the conclusion that there was neither provider nor product bias in this scenario.

“As I read it, the Irish regulator is more concerned with insurance and investment sales rather than mortgages; in fact, where it mentions mortgages, [it says] that it doesn’t apply.”

Sinclair adds that gifts such as free event tickets are covered in the rules around acting in the customers’ best interests and that it is the lender’s compliance teams that make the judgment on signing off on who attends individual events.

Intriguingly, the FCA refused to confirm or deny that plans were afoot to introduce any specific measures over the ‘freebie’ culture, merely parroting what is already existing legislation. It says: “Current levels of commission paid by lenders to intermediaries do not appear to be linked to customers paying more for a mortgage.”

Lender trade body UK Finance also refuses to make any comment around this issue except to say, “lenders are required to record hospitality as part of anti-bribery legislation”.

But there can be no doubt as to the UK regulator’s intentions around commissions and incentives generally.

It has moved to prevent the payment of certain commissions to brokers in the motor finance sector, claiming they stifle competition and act against consumer interests. The FCA is also proposing to make changes to the way in which customers are told about the commission they are paying to ensure that they receive more relevant information.

These changes would apply to many types of credit brokers and not just those selling motor finance. Moreover, following regulator pressure, wealth manager St James’s Place is to implement a series of measures aimed at overhauling pay and perks, including axing benefits such as cruises and company cufflinks.

Perhaps it might be time to research how much those clubs go for on Ebay after all.