Good response to more sustainable commission: AIA
Advisers have welcomed an alternative commission structure, AIA says.
Wednesday, February 25th 2015, 6:00AM
by Susan Edmunds
The insurer has previously had two options: Upfront commission of between 180% and 200% and trail commission of 5% to 7.5%, or upfront commission of 110% and trail of 25%.
But it has developed a new commission structure to help advisers switch between the two: 150% upfront on new sales in the first year, then 45% in each of the following two years afterwards.
Graeme Edwards said it was an option for advisers to consider and the response had been positive.
“It was launched as a discussion point. For this to work we need long-term business that stays on the books. If that suits your business model, if your business is growing and you’re looking to build a strong relationship with clients this might be for you.”
AIA would be following up advisers over the next month who had indicated they wanted to discuss it further, he said.
It doubles the clawback period to four years for advisers who take the option.
Those on the standard commission structure will not have their clawback period changed.
Edwards said AIA was trying to take a step in the direction of a more sustainable model. “We saw a gap in the market and thought ‘why don’t we try it”’. People get it.”
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