BT Financial Group (BT) says its flexible insurance offering that allows advisers to structure insurance inside and outside superannuation is proving popular, despite the potential ban on commissions for one half of the product.
In February this year, the group launched an upgrade to its BT Protection Plans suite, which included new features to enable more flexible ownership structures and funding mechanisms for insurance.
According to BT, these flexible options have proved particularly popular, despite the current Future of Financial Advice (FoFA) reform package indicating a ban on commissions for life insurance held within superannuation was likely in the next two years.
BT National Life Insurance Product Manager, Scott Moffitt, said this was because the current economic environment has led to concerns about cash flow among consumers.
“People are struggling with the availability of funds at the moment, so funding their insurance through super is quite often an attractive option,” he said. “But given that the product features have previously been compromised by choosing that option, I think that may have been a deterrent for some people. You see it very much with income protection. In the non-super environment, almost everyone buys the Income Protection Plus product, but in the super environment they weren’t allowed to.”
He said that while the product enabled advisers to charge a fee for service option for the super-held product, as well as a commission for the linked insurance products outside super, it was adviser feedback around flexibility and not simply regulatory change that drove the product development process.
There is no doubt that advisers work as hard inside a super environment as outside
“There is no doubt that advisers work as hard inside a super environment as outside, so it is difficult to see the justification for having the remuneration approaches being different within those environments.
“Our product does allow for different commission structures within and outside super but I think that’s going to be a natural evolution.
“We’ll ensure our products are always flexible to allow for the different ways that advisers are currently selling and will need to sell into the future,” Mr Moffitt said.
BT says that since launch 50% of income protection policies within superannuation have an attached option through Income Linking Plus, and more than one-quarter (29%) of lump sum policies within superannuation have an attached option through Flexible Linking Plus.
In other news, BT-owned dealer group Securitor has announced that advice firm Minchin Moore Private Wealth has joined its network.
Sydney-based Minchin Moore Private Wealth has 6 advisers and has approximately $400 million funds under management.
Matt Englund, Head of Dealer Groups at BT, said that Securitor was currently on a recruitment drive, looking for practices that match the group’s culture and community.
“We are delighted to welcome Minchin Moore Private Wealth into the fold as the quality of the business is the right cultural fit with Securitor: a boutique advisory firm specialising in personalised strategic advice firmly focused on the needs of their clients. This is a coup for the Securitor Dealer Group,” Mr Englund said.
