Speaking to ifa, Asteron executive manager Mark Vilo said the life insurer is supportive of holding off premium hikes during the three-year responsibility period to mitigate the possibility of a client cancelling a policy due to affordability.
“The AFA has called that out as a challenge and I think [there is] a real opportunity for the life insurance industry to get behind it and support it,” Mr Vilo said.
“I think to further jeopardise an adviser’s future by first of all imposing a clawback, and then secondly imposing an additional premium increase, is going to make it even more challenging for an adviser, going forward.
“Anything that we can do to minimise that is going to improve the customer experience as well as their experience,” he said.
Responding to advice community concerns that insurers will want to cap level commissions, Mr Vilo said the market should be left to decide on the commission rate.
“We won’t be looking to make a cap on level commissions; we will really follow what the market is doing,” he said.
“My take on it is level commissions probably won’t have a clawback. It will really be a situation where there is a higher year-one, like the hybrid remuneration style structure.”
With the transition to the Life Insurance Framework set to significantly challenge advisers, Mr Vilo said Asteron will be looking to use its position to help improve the ways in which advisers operate their businesses.
“As a medium to large organisation, we get access to a whole range of tools and resources that help us become better at what we do, how do we actually pick that up and translate that into an adviser’s practice,” he said.
“That can range from things like our financial modelling, HR, marketing ideas, end-to-end processing and so on. We can actually add value in an adviser’s practice through that way without necessarily talking to them about product,” Mr Vilo said.
Back to the issue,
Fee for Service is back on the agenda.
How much to sell a product ??? Investment / Super / Risk ???
Is an Adviser worth as much as a Solicitor, Accountant or a Medical Doctor ??? Per hour rate ??? The issue of tax deductibility of the service. A ATO ruling needs to be made, just make sure that the ruling is not all Greek.
Would you trust a adviser with your life savings ? Or go to more than one adviser ???
An adviser will have an opinion, they can be tied or a have may be a multi.
Kind regards,
Adrian Totolos.
Business Analyst.
[quote name=”Paul”]The best assistance Asteron (or any other insurer) could offer is to say they don’t support the FSC’s advice killing position on LIF.
Asteron cannot hide behind the FSC or the government on this. The govt is being heavily swayed by the FSC, and the FSC is driven by its members like Asteron.
Don’t pretend that you’re helping us Mark, by providing token assistance for a gigantic problem you have created and you could easily stop.[/quote]
Change is constant Paul. The industry will evolve with new products, people and systems.
If the industry doesn’t evolve, it is a dead, and we all know that legacy is dead, master trust then direct investment and risk products are the future. Legacy products were last sold circa 1996.
The issue open for discussion is Salaried Advisers, employees of the institution.
Kind regards,
Adrian Totolos
Business Analyst.
Is Asteron seriously trying to paint themselves as the nice guy in the LIF debate? They have just slashed level commissions from 32% to 27.5%. It is an opportunistic grab for cash while advisers are on their knees. Advisers who operate on level commissions have nothing to do with churn, which prompted the LIF. Asteron should be ashamed of themselves and advisers should hold them to account.
What Craig Yates said please. Oh and Asteron just increased premiums on IP/Trauma for stepped and Level premiums. Get em in now, I guess.
I probably like point 2 and 6 best as this is really what is worrying our business.
Every Life Insurance company at present is appearing to now be highly supportive of the adviser’s plight against the proposed conditions included within the LIF.
The constant use of terms such as “marketing ideas, HR and end to end processing” at present are just marketing and meaningless spin to take away the focus from the real issues.
Advisers are rapidly tiring of the game of sharades.
What Mark Vilo and every other insurer who truly value’s the IFA relationship could do is this:
1.Confirm exactly what their position was in regard to their submission to the FSC, Trowbridge and LIF.
2.Stand up and state they believe the 3 year clawback proposal is unfair and unworkable and they are not prepared to accept it in it’s current form and submit a request to reduce the clawback to a maximum of 2 years only.
3.Confirm they will only pay the maximum commission payment of 20% to any adviser who replaces an existing policy written
within a 2 year clawback period.
4.Argue that the reduction to an initial commission payment of only 60% by 1st July 2018 is not acceptable and the initial commission payment should remain at the 80% level, based on the findings of the ASIC Report 413 Review of Retail Life Insurance Advice.
5.Strongly argue that the current proposed LIF will not and cannot result in any identifiable consumer benefit,reduced cost of advice or reduced cost of insurance.
6.Confirm and document a list of policy cancellation conditions that will not result in any clawback of commission to an adviser who has not instigated a replacement within the clawback period.
Stand up and have the courage to say publicly what is actually being said to advisers by their own BDM’s and company executives in private about what they really think of the LIF.