Question: What does the term inducements mean?
Inducements are payments or non-monetary benefits which a firm receives or pays out as a result of advising on or arranging investments for its customers. The firm is required to disclose to you, as its customer, the essential terms of any arrangements relating to such fees, commissions or non-monetary benefits in summary form. It may, on your request, provide you with more information. The aim of this requirement is to enable you to understand and be informed of any incentives which may reward the firm for promoting a particular product or service.
Before investing, it would be sensible for you to make sure that you know what the arrangements are if you need to make a complaint about the firm or seek redress, and which investor compensation scheme covers the firm. The firm should give you this information.
