This refers to the monies or other non monetary benefits your bank/investment firms receives from another company when providing an investment service in relation to a particular financial instrument to their customers. The company receiving the ‘inducement’ must disclose this to its customer before providing an investment service and can only accept the monies or non-monetary benefit if certain conditions are met for example the company still acts in the best interest of its customer; as a result of such ‘inducement’ the company will offer a better service to its customers. If you are provided with an advisory service, and the company is receiving inducements, this must be disclosed to you before being provided with the advisory service.
