Partners Life has broken new ground in restructuring the way it pays commissions.
From 1 July 2020, the insurer will be directing all over-ride payments to the registered Financial Advice Provider through which the adviser has placed the life insurance business, and the amount of over-ride payments will be based in future around the quality of a range of customer outcomes.
Currently, all over-ride commissions are made to dealer groups, but from 1 July 2020, if the dealer group has not registered as a Financial Advice Provider, the Partners Life over-ride payment will be directed to the FAP under which the adviser operates, whether it is their own transitional licence or that of a managing agency.
In making its announcement, Partners Life released a table which compares its current commission structure with the new structure to be implemented from 1 July 2020:
The customer outcomes against which volume over-rides will be measured include:
- Customer advice complaints
- The initial advice process
- Replacement advice processes
- Cancellation advice
- Non-disclosure and misstatements
- Service activity
The principal the insurer has adopted in making these changes is based around “Putting our money in the hands of the Customer’s protector,” where other changes include medical commissions received by the adviser to be split in future between upfront and bonus commissions “…to ensure Customer Outcomes cam impact medical as well as risk Bonus Commissions.”
According to the Partners Life release, this redirection of over-rider and fixed support payments into FAP over-riders will financially align the interests of advisers and their FAPs with customer outcomes.
Click here to access the full Partners Life statement, which includes further details around the insurers rational for change and other details relating to how the new over-ride structure and customer measurement outcomes will be implemented.