The company will adopt a new payment structure that will reduce upfront commissions on all life insurance policies to “80 per cent and a 20 per cent annual commission payment during the life of the policy”.
In addition, AMP will mandate that its advisers only be able to access the year one commission every five years per policy, “irrespective of the life insurance provider and applies to all insurance policies written since 1 July 2010”.
The new hybrid structure will apply to both “AMP licensed advisers and non-AMP licensed advisers (including independent advisers) when distributing AMP life insurance products”.
“It is clear the Australian life insurance industry needs to reform in order to help restore customer confidence,” said AMP chief executive Craig Meller.
“This confidence is essential for AMP to achieve its most important objective – offer financial advice to help people improve their lives. These changes, which are initial steps towards a fee for service model, support this objective.”
More to come.
Who pays higher than AMP / AXA Ten Beers?
I only work with retail life insurers and have BT and Zurich at 121% (GST Inc.) for Upfront Commission and the rest behind them at between 110% and 116%.
Not that I care as I have my preferred insurers but who pays higher than AMP?
BREAKING NEWS!
To ALL PARTIES involved in deciding the fate of Risk Adviser’s future remuneration in Australia PLEASE NOTE that there are NO queues of people clamouring to buy Life Insurance at Advisers office doors.
THESE QUEUES SIMPLY DO NOT EXIST
The premise that you have been operating under in determining OUR FUTURE AND THE FUTURE OF YOUR STAFF is totally incorrect.
Most Advisers work extremely hard to FIND A CLIENT IN THE FIRST
PLACE then look after their clients simply to generate a fair and reasonable
reward for effort. Heaven forbid that the underwriter were to knock back the business or that there was an issue with the client’s bloods /medical, or simply that the client doesn’t proceed.
Historically, Adviser remuneration has been high in recognition of the difficulty of the role an Adviser has and the variables that exist, some of which are beyond the Advisers control. Instead of talking about reductions in remuneration levels why not improve Life Office efficiencies. If everyone is talking about current Industry costs being unsustainable fix the inefficiencies. Has the FSC or John Trowbridge looked into this aspect of the Industry?
The discussion around Life Offices reducing premiums rates if Hybrid commissions were to become the norm further reduces Adviser remuneration. It’s a double edged sword!
BREAKING NEWS!
To ALL PARTIES involved in deciding the fate of Risk Adviser’s future remuneration in Australia PLEASE NOTE that there are NO queues of people clamouring to buy Life Insurance at Advisers office doors.
THESE QUEUES SIMPLY DO NOT EXIST
The premise that you have been operating under in determining OUR FUTURE AND THE FUTURE OF YOUR STAFF is totally incorrect.
Advisers work extremely hard to FIND A CLIENT IN THE FIRST PLACE then look after their clients simply to generate a fair and reasonable reward for effort.
Missed that last bit. I wonder if it is in context? That would surprise me.
If they retain the same commissions for hybrid. Then why would it be expected to have a price drop?
You will find other insurers that paid higher commissions. “Hypocracy at its best”? or misinformation at its best?
“These changes, which are initial steps towards a fee for service model, support this objective” I was not aware that AMP was supportive of a complete removal of commissions. How many other insurers support this objective? Have fun with that AMP aligned advisers.
Why would there be a decrease in premiums? The same commission is being paid, just over a longer time period.
Ooooooooh a photo finish on that one! Thanks Hypocracy!
With a commensurate decrease in premiums?
Yes I don’t see any reduction in premium????
Hi BJ, your question had me second guessing myself there for a minute but according to the current AMP Adviser Guide (and as I first thought) the Upfront Commission for Life, TPD & Trauma is highest at 123.75% with 10.12% trail and 115.50% Upfront Commission for IP with 12.10% for trail. This is also what AXA had in place for advisers prior to their takeover by AMP.
What you would expect from the AMP who still think their s*** doesn’t stink. I trust that AMP advisers will see it for what it is, an attempt to maximise their profit at the advisers expense and leave in droves. It is the only message that AMP will understand.
RJL – This is only step ONE of AMP’s “Managed Transition†with more bad news to follow! The objective is very clear and it’s not Hybrid. Don’t be naive to think that it is the way things are going to pan out for the future. There is no time for complacency here!
I think there are more details to be released yet, as only just announced. I am happy with the the proposed hybrid system, it’s better than the alternative that would be legislated if we don’t “get our house in order” as has been said.
I hadn’t come across a situation recently where AMP was competitive; what were they offering? BT is still at 121% and it’s the highest I’ve seen of those I’ve been working with.
I assume that the “upfront” commission ban by AMP
today is step one of AMP’s “Managed Transition†with more bad news to follow.
What was AMP’s submission to LIAWG? What happened to their motto “AMICUS CERTUS IN RE INCERTA” (a sure friend in uncertain times)? I see nothing friendly
to Advisers in AMP’s “knee jerk†reaction. The solution to the current problem
requires ALL PARTIES to pay a price NOT JUST ADVISERS. Effective immediately
L/O’s should increase ALL IN FORCE RENEWALS from 11% to 30%. This will protect
this “in force” business. There will be a cost but it’s the L/O’s that want change also. In exchange Advisers with 5+ years service will accept Hybrid commission only (say 80/30) for 12 months then all future business income would be Level at 30%/30%. Advisers of less than 5 years need a 3-5 year Hybrid transition period. I have seen many changes in my 47 years in the Industry. The proposed changes are the
most far reaching and will decimate our Industry.
How amusing is this. The life insurer with the highest upfront commission rate (that they offered advisers voluntarily and not under duress) to entice them to write with them, now comes forward and does this. Sure, I understand the industry appears to be moving towards this hybrid commission but how funny it is that AMP comes forward first and does this when their initial enticement is probably what attracted those minority unscrupulous advisers to conduct themselves in the manner they have.
Perhaps someone can clarify for me; “the company will mandate that its advisers only be able to access the year one commission every five years per policy, “irrespective of the life insurance provider and applies to all insurance policies written since 1 July 2010—
So if I rewrite a client with poor, overpriced, mismatched cover from another provider, I won’t be paid for doing the best thing by them and bringing their business to AMP?