Fidelity: Incentives regime changing
Fidelity Life says its adviser recognition programme is evolving to emphasise education, professional development and corporate social responsibility.
Wednesday, April 11th 2018, 6:00AM 
2 Comments
by Susan Edmunds
It comes after AMP revealed last week that it was putting a stop to overseas trips for high-performing advisers.
AMP said the recent FMA report into life insurance replacement business highlighted that there were improvements that could be made in the industry.
“While there has been significant value in offering this programme given its principal focus on professional development, we believe programmes of this type, where qualification is still influenced in part by volume performance, are no longer appropriate.”
A Fidelity Life spokesman said the industry was going through a fundamental change, which it was responding to, to ensure it aligned with consumer and adviser expectations.
He said the insurer supported a model that put consumers’ interests first and its adviser recognition programme was “evolving”.
“Qualification for our main recognition initiative includes quality (retention) criteria, not just sales.
“We expect the independent advisers who advise on our products to always put their customers’ interests first – this includes disclosing remuneration and incentives in accordance with legislation.”
Cris Knell, executive general manger of distribution at Suncorp New Zealand, including Asteron Life, said it had committed to its 2018 annual programme for top performing advisers.
"We welcome an ongoing conversation about how life insurance advisers are remunerated and rewarded for the important role they play.
"We will take the FMA’s recent report into account as we continuously review all our practices to ensure they provide value to our customers and stakeholders," he said.
"We believe that the vast majority of advisers are committed to the financial wellbeing of their clients and we’re confident that we can work together to continue to deliver outcomes that our customers need and want."
In its submission on the Financial Services Legislation Amendment Bill, AMP said it advocated for complete disclosure of all remuneration.
“This should include disclosure of all remuneration or benefits directly or indirectly paid to the adviser as a consequence of a transaction.
"A value should be attributed to any ‘soft commissions’ that are paid or any bonus payable based on volumes. In our view if an individual or FAP is unable to quantify the soft commission earned such a commission should not be paid."
“Additionally it provides a more fact based point of inquiry for FMA to assess whether conflicts have been appropriately managed and makes objective assessment of prioritising clients’ interests easier. We are also concerned that the same incentives requirements do not extend to financial advisers or other financial advice providers. Incentives to them are similarly prone to driving inappropriate behaviours.”
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Comments from our readers
Instead of standing up for the industry that pays his salary, he took the opportunity to try and convey how socially ethical AMP is.
No interest in adviser distribution and the advisers that distribute their product. Instead, look at us, AMP, the insurer who cares. He did not support the industry, he took the opportunity to put the boot in rather than tell the world that the industry adds millions of dollars of value to customers every year. The AMP model is all about AMP, stuff the rest of you!!
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