Changes to commission payments in new agreements

To ensure they comply with the new licensing regime under FSLAA and the FMA’s expectations for the financial advice industry, insurers have been rewriting their financial adviser agreements over the past few months.

Among the most recent is AIA, and advisers spoken to by Good Returns say the new AIA agreement is similar to those they have seen from other insurers.

AIA’s agreement will apply to all products issued after September 5 this year.

The biggest changes are around the payment of commissions to unlicensed advisers and the ability of the insurer to effectively take over the clients (and commissions) of advisers who become unlicensed, decide to leave the industry or cease to work for a licensed FAP. AIA will then and arrange for these clients to be serviced by another licensed adviser.