Go With Hybrid – Advisers

5
My advice practice could successfully operate under a hybrid commission model for life insurance advice.
  • Agree (82%)
  • Disagree (12%)
  • Not sure (6%)

There is widespread acceptance by advisers that a hybrid commission model would deliver a sustainable commercial future for their business.

In a poll designed to consider alternative remuneration options to those advocated by John Trowbridge, 79% of advisers have said they agree with the statement that “My advice practice could successfully operate under a hybrid commission model for life insurance advice.” As we go to print, only 14% of poll respondents disagree with this statement, while 7% are undecided.

This response by advisers to our poll has been accompanied by a release this week by AFA President, Deborah Kent, who commented that the AFA completely rejects “… the principle that an advice business should be expected to subsidise advice to the client to prove it is in the client’s best interests.”

Working below cost will see an exodus of advisers from providing life insurance advice

Warning the industry about the unintended consequences of such a remuneration model, Ms Kent continued, “Working below cost will see an exodus of advisers from providing life insurance advice – and that would be a catastrophe for the Australian public, and a disaster for the future of life insurers.”

Meanwhile, one adviser commenting on our poll advocates that only level commissions should be paid for replacement business, but that a hybrid level of commission be paid on all new business:

“Replacing a policy ie. life insurance to another life insurance policy – level. New policy, new premium ie. not replacing another policy eg. a new life insurance or new trauma policy that the client does not have in place – hybrid.”

Does this approach reflect your view? Or do you support another solution? Either way, you have another week to have your thoughts count in this poll…



RELATED ARTICLESMORE FROM AUTHOR

5 COMMENTS

  1. What does it matter what we think. Its too little too late. The decisions have already been made and it seems we, the dedicated risk adviser, can do nothing but stand back and watch our advice practices be financially ruined and the Australian public will suffer because of under insurance.

  3. Hybrid/ level is flawed until there is a lock on clients not signing over business to their accountant or another advisor (often without even knowing what they are signing).

    I agree with Sue- “they” are going to do what they want no matter what we say- I see doom for this industry, insurance rates plummeting, experienced advisers leaving and no incentive for new blood. Banks will take over.

  4. I think hybrid is misleading the next thing we will hear is we charged a HYBRID just to get double the renewals .it’s a hiding to nothing Upfront for ever

Comments are closed.