Partners Life has announced changes to its commission structure and as of January 1, 2025 it will no longer calculate bonus commission based on its Customer Outcome Matrix measurements. New risk bonus commission rates will now be 100% of annual premium.
The insurer announced the changes at its recent roadshows in Hamilton, Auckland, Wellington and Christchurch, and explained the change in how bonus commission is calculated, along with a new business adviser agreement and product accreditation requirements, came from its evaluation of the effects of the Financial Markets (Conduct of Institutions Amendment) Act 2022 (CoFI).
New risk bonus commission rates will now be 100% of annual premium, excluding policy fee, and medical bonus commission will be at 25% of annual premium, again excluding policy fee.
…the Customer Outcome Matrix was introduced in July 2021 to calculate bonus commission…
In an update to advisers Partners Life says the Customer Outcome Matrix (COM) was introduced in July 2021 “…to calculate bonus commission with the primary objective to provide a tool that enables advisers to demonstrate their clients’ understanding of the advice provided and to incentivise positive adviser conduct.”
It says the CoFI regulation changes, which take effect on March 31, 2025, mean it needs to make changes to COM to ensure compliance with a section of the act, titled ‘Prohibited Incentives’.
Partners Life says it also received adviser feedback around the complexity the COM calculations introduced into adviser’s business “…and have reassessed how bonus commissions are calculated with a view to simplify the process.”
It also notes that FAP Override will continue to be paid to the FAP license holder at a flat rate of 30% of the bonus.
…These changes mean that customer surveys will no longer be linked to commission…
“These changes mean that customer surveys will no longer be linked to commission; however customer surveys will continue to be sent out to clients, this helps to confirm customers’ understanding of the advice provided and to continuously improve the adviser and customer experience.”
If the client responds to one of the questions with a ‘no’, an email with the details will be sent to the adviser to follow up with the client and remove any uncertainty they have around the process.
Adviser Business Agreement Changes
The roadshows also heard that Partners Life has updated its Adviser Business Agreement to include CoFI requirements and the adviser update notes it had “…added more descriptive wording to some of the clauses to remove any uncertainty around the meaning behind it.”
The new Adviser Business Agreement takes effect from January 1, 2025.
Product Accreditation Requirements
In ensuring compliance with CoFI, Partners Life will also require all advisers who provide regulated financial advice to complete compulsory product accreditation.
It says the accreditation consists of 10 online modules, titled Adviser Accreditation – Core Knowledge Assessment in the Partners Life Academy. Advisers must complete the accreditation by 31 March 2025.
Click here for the Partners Life Academy.