Asteron proposes ‘naked commission’ model

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 and 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.”

Mr Vilo said that 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.

Speaking to Risk Adviser, 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.”

In the wake of the Trowbridge Report's release, life insurers have come under pressure from members of the risk advice community to reveal their positions on risk remuneration.