Advisers who swap upfront commissions for hybrid and level models will be rewarded with lower professional indemnity fees and professional accreditation, under a new program to be launched by Guardian Advice.
The risk-focused dealer group is taking a proactive approach to driving change among its advisers, rewarding them for initiatives such as implementing sustainable remuneration models. The move is designed to improve the public perception of advisers, which is often marred by the practices of a small number of ‘bad apples’.
“Despite the uncertain regulatory environment, many industrious businesses in our profession are thriving in these trying conditions and delivering exceptional service to clients,” Suncorp Life’s Head of Dealerships, Simon Harris, said.
It’s about time we rewarded advisers who run their business based on professional conduct and sustainable business practices
“It’s about time we rewarded advisers who run their business based on professional conduct and sustainable business practices.”
Mr Harris believes the current focus on the sustainability of the insurance industry will drive more advisers to transition to hybrid or level commissions over the coming year.
“We’ve seen a lot of debate in the media regarding commissions and the sustainability debate. Advisers are picking up on this – they are listening, and they are acting,” he said.
Mr Harris said he had already observed a ‘subtle’ move towards alternative remuneration models among advisers in Suncorp’s Guardian Advice group.
“We’re finding that advisers are more aware than ever before of the benefits of writing hybrid and level commissions, in particular in relation to the sustainability of their own businesses, and the role that asset plays in setting up an effective succession plan.”
While Guardian Advice does not mandate an approach to remuneration for its advisers, Mr Harris said the transition to hybrid/level commissions was one of the criteria the group will use as part of its proposed recognition program.
Among the criteria for recognition are:
- Investment in professional development and ongoing education beyond the mandatory requirements for advisers
- Utilising hybrid and level commission structures to build sustainable revenue streams
- Leveraging compliance as a business enabler that drives best practice
- Membership of a professional association
“It’s unfortunate that a small share of rogue advisers have been the focus of industry attention. These advisers are the exception, and not the rule, and don’t deserve all the headlines. We need to turn this out-dated paradigm on its head and recognise the many business-owners that run professional growth-focused practices.”
Interesting concept Simon. I assume the reverse will happen for those not doing the above as someone has to make up the difference in the premium Guardian pays. If you reduce for some you must increase for others? BTW cant see the link between up front and level from a PI perspective though it s good marketing. Maybe its time we helped the advisers understand the real drivers of PI premiums so they adjust their practices to ensure lower costs.
From a professional advisers perspective making only a small number of changes to Simon’s criteria and commentary may work far better for all parties…
1. Investment in professional development and ongoing education beyond the mandatory requirements for advisers
2. Utilising much improved level premium offers that do not condemn a client to the current average break even periods which are far too long
3. Leveraging compliance as a business enabler that drives best practice
4. Membership of a professional association
“It’s unfortunate that a small share of rogue insurers have not been the focus of industry attention. These insurers are the exception, and not the rule, and don’t deserve all the headlines. We need to turn this out-dated paradigm on its head and recognise the many insurers that run professional growth-focused companies with sustainable offerings.”
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