AMP supports commission cut
AMP New Zealand has lent its support to colleagues across the ditch, who have slashed advisers' upfront commissions on life insurance to 80% of the first year’s premium.
Thursday, May 7th 2015, 6:00AM 
2 Comments
by Susan Edmunds
AMP's Australian chief executive Craig Meller said the 3500 advisers who distributed its products would use a hybrid model from July 1, of 80% upfront and 20% annual trail commission for the life of the policy.
Previously, they were paid 120% of the first year’s premium.
Advisers will only have access to first-year upfront commission once every five years per policy.
The Australian industry has come under intense pressure to reform adviser remuneration.
The Trowbridge Report recommended level commissions be cut to no more than 20% of premiums, or $1200 for premiums below $2000. Advisers have been accused of churning business for upfront commission, to the detriment of clients.
Meller told Australian media the AMP move was worked out in consultation with advisers. “Advisers are essentially going to have to adjust their business models to live in an environment where they are not going to have the same upfront remuneration,” he told the Australian Financial Review.
A spokeswoman for AMP in New Zealand said it supported the decision.
"We support the leadership role taken by AMP in Australia as it continues reform in the advice industry towards higher standards of advice. AMP New Zealand has adopted similar leadership positions around commissions - leading the market in investment fee for service models in 2011 and taking a leading role in supporting the largest QFE for independent financial advisers in the market. There does not appear to be the same level of regulatory and market concern in New Zealand around the remuneration of advice and as such it is not apparent where or when the drive for similar reform to Australia will occur. We have no immediate plans to follow suit.”
| « ISO supports disclosure law | Old trail income under review » |
Special Offers
Comments from our readers
I don't think it's all about lowering commission (@Billy)it's about only paying for new business once irrespective of the carrier.
It's having the intestinal fortitude for the carriers to do their part in stopping churn. At present, it's all a bit self- serving really at the consumers cost.
Everyone will soil themselves when legislators decide to step in and do it for us.
We are seeing small steps and talk which is positive, I suppose.
Sign In to add your comment
|
|
Printable version |
|
Email to a friend |
