Centrepoint Alliance has announced it will dispense with upfront commissions in favour of hybrid and level commission options only.
In the first move by an independent licensee on the critical issue of remuneration for life insurance advice, the release by Centrepoint announcing this initiative noted the dealer was ‘…pleased to advise its advisers have voted overwhelmingly in favour of using hybrid and level commission remuneration options for life insurance’.
The new policy comes into effect from 1 July 2015, at which time upfront commissions will no longer be available to advisers operating under the Centrepoint licence.
Centrepoint Alliance CEO, John de Zwart, said this initiative had the overwhelming support of its advisers, with 9 out of every 10 voting in favour of the change. “I am very pleased that our advisers have shown such leadership and worked so cooperatively to make this positive reform in the best interests of clients, advisers and the whole life risk industry,” he said.
Mr de Zwart continued: “This will remove any perception of conflict of interest in advising clients while ensuring they can access the quality advice they need.” The Centrepoint chief added the move to hybrid (or level) would ensure that advisers remain viable and are appropriately rewarded for their valuable advice, and that it would also encourage new advisers into the industry.
“Many clients today have complex needs and high financial commitments that require personal advice from an expert to ensure their dependents and lifestyle are properly protected. Our individual advisers have demonstrated great professional maturity in making this change and the AFA has shown excellent leadership in contributing to sustainable industry reform,” commented Mr de Zwart.
This announcement follows closely behind the announcement of the move by AMP to a hybrid commission model, released earlier this week (see: AMP First Insurer to Mandate Commission Reduction).
