Speaking at the parliamentary joint committee on corporations and financial services life insurance inquiry in Sydney last week, ClearView Wealth managing director Simon Swanson outlined the major conflicts of interest surrounding approved product lists, such as shelf space fees, volume based bonuses and consistency bonuses.
“Well, basically you go along and you pitch to a company your credentials as a product provider and they will say, in some cases, the fees are up to $650,000 per annum, in some cases, $80,000 per annum and so on. It’s just a straight bribe,” Mr Swanson said.
“It should be neutral where the product is placed based on the needs of the customer.”
Mr Swanson said ClearView — which also has an insurance arm — has 100 per cent open product lists, but conceded that its products won’t be the best for every customer’s circumstance.
He emphasised that other deal groups are not doing the same thing.
“We pay no bonuses to anyone for volumes or consistencies and we pay no shelf space fees and that is why we have been excluded from a number of companies’ approved product lists.
“I made the observation in the results we announced to the ASX yesterday we’re now on 293 boutique licensees or dealer groups on their approved product lists but we can’t get onto the big ones because we refuse to pay shelf space fees.”
Mr Swanson reiterated his criticism of FSC around the issue of APLs, saying it has made no progress in the last 18 months.
He also noted that the Trowbridge report recommended half of insurers should be on APLs.
“I have no idea how Mr Trowbridge came to that conclusion,” Mr Swanson said.
The true reason why many licensees arent willing to put Clearview on their APSL is not becuase of shelf space fees – but because they remember how Swanson built the Clearview risk book following his days at CBA…. It hardly aligns with the rhetoric we see from him now.
I agree that dealership volume bonuses and having limited APL’s is not a good thing but I also believe independent risk advisers should be adequately paid for the work we do.
Clearview will benefit from the LIF in the same way as all the other insurers that stitched up advisers and customers.
I saw Simon Swanson’s name in a top rich list and I’m sure he did not have any issue with limited APL’s when he was at Comminsure.
He seems quite happy to take an obscene level of income and bonuses paid for by the policy holders but doesn’t want to pay for distribution.
Sorry but this is just another overpaid CEO with their own agenda.
We have all worked out that Trowbridge (with his General Insurance background ie no Life Insurance experience what-so-ever) was a paid stooge of the FSC and thanks to the support of the adviser associations the Government have been misinformed and have brought in legislation that will leave consumers (and the adviser who look after them) worse off! in fact it is so bad that even some of the insurers are complaining. Trowbridge is more than bank-biased, his report mirrors the institutional submission making Trowbridge nothing more than a mouth-piece for the FSC. 50% of insurers on APLs is stupid nonsense, uncompetitive and not in the best interests of the consumer Mr Trowbridge.
Test
Who knows where Trowbridge got any of his statistics or conclusions from but the FSC might be a good starting point