Asteron Life has confirmed it will be extending its additional 15 percent first-year premium discount offer for new clients who opt for the insurer’s wholesale commission option.
First launched more than three years ago (see: Asteron Rolls Out New Commission Structure), Asteron already offers a 24.6 percent built-in premium discount for the wholesale commission option and its customised 77/22 offer.
Now in the shadow of a federal election, where the Opposition is currently ahead in the polls (see: Labor Reaffirms Position on Future of Risk Commissions), Asteron has confirmed to Riskinfo its intention to continue to offer the additional 15 percent first-year discount on premiums for those advisers who may be exploring viable business options that include transitioning to a fee for service business model – either because they see this as a feasible alternative or because they believe that risk commissions will eventually be banned, or both.
To that end, the insurer continues to offer its Adviser Service Fee facility, which allows advisers to charge new clients an initial fee for their advice services, which is collected on their behalf by the insurer with the first year’s premium. Ongoing fees can be charged from year two and can be applied to both new and existing customers.
…it is also important for advisers to have both greater control and access to alternative solutions
Asteron Life’s Head of Life Intermediaries, Daniel Waller, told Riskinfo that, while Asteron Life supports the continuation of risk commissions as a valid method of remuneration, it is also important for advisers to have both greater control and access to alternative solutions that may better suit their present day or future business models.
Click here for more details regarding Asteron Life’s Adviser Service Fee offer.
This doesn’t help us Asteron.
I have never received a service fee from a client in my life. I get a renewal payment from the Life office to acknowledge I kept my client’s policy on their books for another month or year, assisting their profitability. With a shift to client paid ‘service fees’ comes client choice and as we all know, clients will turn off any service fee for insurance the first chance they get.
With upfronts being reduced by 45% over 3 years, advisers are relying on their renewals more than ever to cover increasing staff, compliance and admin costs. Turning renewals off (or helping facilitate a change to cancellable ‘service fees’) will destroy adviser’s turnovers, forcing the majority out while offering no incentive for anyone to take their place.
And while Asteron will be saying ‘we tried our best’, those of us who look at a dead industry will be saying, ‘no, you handed them the bullets they used to kill off the business’.
Dear insurance industry,
If you really believe your businesses will flourish on direct sales and the odd app from the few FPs who will be bothered to arrange insurance for their clients, keep working on this & similar ideas.
However, if you believe dedicated insurance advisers are an important part of the sustainability of the industry, perhaps you need to devote your energy into fighting for what is needed to overcome the current bureaucratic stupidity rather than help facilitate their demise.
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