Trail commission rules blamed for churn

Adviser Allan Rickerby, who works in Australia and New Zealand, said he was not surprised by the recent Australian moves to a new, hybrid remuneration model.

Upfront commissions will be set at 60% of annual premiums and include a maximum ongoing or trail commission of 20% in all subsequent years.

“This probably won’t flow quickly into New Zealand but things will change from where and how business is currently being done here in New Zealand. Ultimately it will be right for the consumer and right for the professional adviser.”

He said New Zealand’s system of ongoing commission remaining with the adviser who sold the policy, even if their client switched to a new broker, needed to change and was an anomaly internationally.