June 16, 2017
Life insurers are paying up to $200 per adviser per annum to provide education and training on products on a licensee’s approved product list (APL), with this figure being described as ‘modest’ by Zurich Financial Services.
Responding to a request for additional information from the Parliamentary Joint Committee Inquiry into the Life Insurance Industry, Zurich Life and Investments Australia Chief Executive, Tim Bailey said educational support payments, which were also called sponsorship payments, were usually a flat fee and this figure was consistent across the advice sector.
“On average the support requested equates to $150 to $200 per adviser per annum. This figure is consistent across both institutionally owned licensees as well as small to medium boutiques,” Bailey said in the written response to the PJC.
“We believe this to be a modest amount given the level of work in co-ordinating and paying program costs such as venue hire, catering costs, design and printing, filming, and web hosting,” he said, adding that payments also supported the provision of face-to-face training, printed materials, videos, online apps and webinars.
“There are no guarantees associated with APL positions…Any support is based on merit…”
Bailey said product education increased the level of product knowledge among advisers and securing a place on an APL and the payment of sponsorships did not guarantee sales from a licensee.
“There are no guarantees associated with APL positions…Any support is based on merit, meaning an insurer must continue to ensure their overall offering remains compelling,” Bailey said, adding that many advisers were still able to place business with insurers that were not on their APL where it was in the best interest of clients.
He also said that Zurich supported a minimum APL size of at least three insurers, telling the PJC this was necessary to have a sufficient range of products to allow advisers to act in the best interest of their clients while also recognising that advisers could not have an in-depth understanding of every product in the market.