Quality commissions attract quality advisers, says Ballantyne

Is this not the same Naomi Ballantyne who has on many occasions had a swipe at insurers for what was considered to be too much commission, and potentially attracting the potential for churn? Can't have it both ways.

Gotta love Naomi.

Does this mean that she will not allow any advisers with Partners Agencies to have discounted rates on websites, or to discount commissions to clients.

Sounds like Haakie was being tongue in cheek and everyone else is believing.

That's interesting Naomi because apparently if you have a Partners Life agency you can cut your commission entirely and still receive full bonuses and renewals. If this is true then isn't that allowing your products to be sold at discounted rates? Not to mention encourage churning?

Hmmm……Offer a direct product at a cheaper rate, and tell your advisers to drop their commission to match that rate, versus one rate for all, and the adviser gets the option to reduce their commission to provide a cheaper premium to the client. Isn’t there a difference?

A client receives advice, and a cheaper premium by an adviser choosing to reduce their commission.

The ability to reduce commission to attract a cheaper premium has been in the market for years. It’s not just a Partners Life specific, as agreed to by Milton Jennings and Darren Franks.

I know a number of advisers who will reduce commission to attract a cheaper premium for longstanding clients, and in some cases, new clients who need cover, but are price sensitive. How is that a bad thing, and how does that encourage churn?

I would have thought an adviser should be applauded for offering advice, and if need be, willing to sacrifice some of their income stream to make sure a client is able to afford the cover they need. Some obviously see this as an awful thing for the industry.

Perhaps the folks in Smales Farm have a short memory (as does it also appear to some of our colleges in the industry) that advice may have averted a one legged painter from not receiving a payout. I guess that client had the someone in Sovereigns call centre fighting their case with Sovereign claims?

I agree with Milton that premium cost is one part of the equation. A question though. If the site he refers to offers reduced commission to the adviser and this offers a cheaper premium to the client, then how does that differ from Partners Life allowing advisers to reduce commission?

I’m afraid that while utopia would mean every person has a broad risk plan, affordability is an issue and rather than focus on commission, focus on what we are here to do as an industry, and that is make sure we solve the underinsurance problem in New Zealand, while at the same time, making sure that we protect the consumer with adequate cover and a sense of compassion at time of claim, (which I just don’t see happening with non-advice product).

Yes the internet may drive cheaper costs to bring the business on the books for insurers, but what price when it goes wrong and there is no one to defend the little guy.

‘Hakkie’ may have jested about dropping commission, but if it is true that the product offering is inferior through the Warehouse (and is generally the case through internet sales), then are those who use internet based product sales being offered a dis-service, and when it goes belly up at time of claim, we as an industry, suffer the consequences.

This is nothing new. Sovereign did it 12 years ago and so they. The industry is going in a different competition. When they do, it is fine but new comer does is wrong. Sovereign is doing against their own Advisors ??

yawn....another day and we hear the same story!!

@ fascinated
when i go to harvey norman or the warehouse or pak n save and ask for discount....do i get it....yea exactly!!

Advisers have faced competition from direct insurance offers for many years and the Warehouse is nothing new. Advisers who want to offer the same level of premiums as a direct offer must be using price as a key part of their proposition to their clients. Fact: There will always be cheaper cover. Fact: If you say you will get the cheapest cover you will disappoint your clients when they find a cheaper offer. Live by price die by price. The bigger issue is if advisers offer clients advice and then they jump online and find the same company and the same covers online, and it is cheaper, then they may well say 'Thanks for the advice but we found the ABC company on Insurance Online dot com and it was cheaper.' Therefore you need to value your advice. Build Trust, Educate, give good Advice, don't just Sell Insurance.

For many years now I have seen successful insurance salespeople, whose main skills seem to be charm and concluding deals for events that may never occur, earn incomes in excess of those earned by many well qualified lawyers and doctors. I dare say this talk of discounting commissions could be a bit unsettling for some.
I also suspect that disclosure of commissions and justifying your value will be easy for some and sticky for others. However, it is pleasing to see growing professionalism and focus on client best interests in insurance advisers, typically the younger ones.

If you need to discount your commission, offer your client a "no advice option" or full service, that would include a fee for the plan and a monthly fee for your claims service and annual reviews.