Adviser Interest in Linking Commission Levels With Quality

There appears to be cautious support from advisers on the question of whether risk commissions could, or should, be linked to quality criteria.

Results from out latest poll show that 53% of respondents support the notion that the level of risk commissions for advisers should be linked to quality factors.  24% disagree, while a relatively large proportion (23%) are unsure at this point, indicating more discussion/debate is needed.

If we tinker with ‘strategies’ rather than fix the problems, we will just be digging a deeper hole

In launching our poll last week, we cited areas such as policy retention and client satisfaction levels as two possible factors that could be taken into account in future when determining adviser remuneration (commission) structures.

The question itself stems from the broader industry debate on sustainability and the recent announcement from the Financial Services Council about its agenda to review adviser remuneration as part of the sustainability issue (see: Renewed Pressure on Risk Commissions).

One adviser, Jeremy Wright, sought to place the question in perspective by offering the contention that: “Clients are what makes sustainability easy or hard.”

He said clients want and demand service and products that fit into the following criteria:

1. Make it easy to purchase
2. Make it easy to increase
3. Make it easy to administer
4. Make the pricing easier on the budget e.g. no 15% or higher price hikes
5. Make it more efficient to get ‘on claim’ clients back to work

Mr Wright added, “If we tinker with ‘strategies’ rather than fix the problems, we will just be digging a deeper hole.”

Meanwhile, other feedback questioned whether such a system, while potentially attractive as a concept, was feasible or practical.

Where do you position yourself on this question?  Our poll remains open for another week for you to cast your vote and add your comments to a debate that we believe will continue for some time to come…