FSC report a missed opportunity: Naylor

The Melville Jessup Weaver report on life insurance commissions was released on Monday, paid for by the Financial Services Council.

MJW approached the FSC with the idea for the report after a similar one was produced by John Trowbridge in Australia.

The MJW report says high upfront commission rates are driving churn and inappropriate product replacement by advisers. It recommends a new commission model of 50% upfront and 20% trail, instead of up to 200% upfront and about 7.5% trail at present.

Mike Naylor, of Massey University, said the commission structures seemed to have come directly from the Trowbridge report and did not take into account the different cost structures in New Zealand.