Asteron Life has provided a glimpse of the remuneration model proposed in its confidential submission to the Life Insurance and Advice Working Group, as the Suncorp-owned insurer urged advisers to consider how they will “future-proof their businesses”.
Speaking at an adviser roadshow held yesterday in Sydney, Asteron Life executive manager Mark Vilo outlined the main points of its response to the Trowbridge Report, saying that the business initially “oscillated” over whether or not to put in a submission.
However, the insurer decided to “because we are a supporter of the independent financial adviser market [and so] there was a lot in there that we wanted to respond to”, he said.
Mr Vilo said the insurer’s submission looked closely at the different remuneration structures put forward by Trowbridge.
“In the response, we provided pros and cons for each of those and whether they would address the challenges of our industry,” he said.
Asteron Life’s submission also commented directly on the level commission proposals.
“One of the things we put forward in the response was the idea of having a form of naked or wholesale pricing, in the same way that the investment fraternity do,” he told the audience.
“The adviser acts as a wholesaler. If the client comes to Asteron Life, they pay the full rack rate, but if they go via adviser they get the wholesale rate and the advisers can dial up the fee.”
Speaking to ifa, Mr Vilo said the challenge for advisers would be to put a value on their advice and that it was entirely possible that the life industry would move to an exclusively fee-for-service model at some point in the future.
“Advisers should start thinking about their business models and whether or not their current model is future proof,” he said.
“At the end of the day, it's about advisers putting a value on the service they provide.”
These comments come as insurers have come under pressure from members of the IFA community to reveal their positions on risk remuneration.
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