The support from Madison Financial Group follows recent announcements from other non-aligned dealer groups to mandate hybrid and level commission structures for all risk insurance advice.
In a statement, Madison Financial general manager Giulio Russo said he hopes other insurance product providers will adopt a similar approach to AMP.
“Providing the products stack up and meet our clients’ needs, our advisers will support those product providers that have flexible remuneration structures in place,” Mr Russo said.
“We currently have a broad approved product list of insurers including AMP so we are hopeful that we can retain existing arrangements.
“However, product providers must offer remuneration structures that are sensible and commercially viable,” he said.
Mr Russo also pointed out that what would be even more “market leading” would be if insurance companies introduced a reduction of 10 per cent in insurance premiums.
“This is a perfect opportunity for them to really help address high lapse rates. For example, why not reward clients who stay with insurers for three years or more via a rebate or reduced premiums,” Mr Russo said.
“The adviser will need to take this into consideration when reviewing client policies, therefore ensuring the client’s best interests.
“The disappointing thing in the industry is that there has been little product innovation to encourage consumers to take out insurance and retain it once they’ve got protection in place. Let’s hope we see some innovation going forward,” he said.
Independent Advice – It would be very foolish for the industry to believe that enforcing/mandating a commission change to Hybrid and/or Level will ensure quality advice, best interest and consumer take-up rates. How can corporate entities, with vested interests, be serious about addressing the underlying issues without focusing on REAL problems, such as:
a) Product providers need to implement systems that enable advisers to service a clients policies. Online admin access.
b) Product providers need to simplify the alteration/increase/decrease capability of their policy systems. Online adviser access to quoting & adjustments.
c) ASIC to seriously address the known churners.
d) Industry to continue higher education & professionalism.
e) Stop Direct Insurers advertising with MISLEADING & DECEPTIVE material.
If the industry is serious about Best Interest for consumers then force all stake-holders to provide QUALITY OUTCOMES. Keep ADVICE efficient!