Getting on an APL costs $150 to $200 per adviser
A Parliamentary Committee has been told life insurance companies pay between $150 to $200 per adviser a year to support their products on the approved product lists (APLs) of financial planning licensees.
Zurich Financial Services Australia has told the Parliamentary Joint Committee (PJC) on Corporations and Financial Services that it believes the $150 to $200 per adviser cost is worth it in circumstances where it is one or three life insurers in Australia that do not own distribution channels.
In doing so, the insurance company sought to argue that gaining a position on an APL and the payment of sponsorships were “two independent concepts”.
Members of the Parliamentary Committee have queried Zurich and other insurers about whether so-called “educational support payments” are just shelf space fees by another name.
However, Zurich said that an APL position in itself did not guarantee sales support from a license and that any support was based on merit, “meaning an insurer must continue to ensure their overall offering remains compelling”.
Zurich said that, similarly, almost all APLs have “robust ‘off-APL’ processes in place, allowing their advisers to place business with other insurers where it is deemed to be in the best interests of their clients.
On the question of “educational support payments”, Zurich described them as an “enabler of detailed product knowledge among advisers”.
“The provision of such education on an ongoing basis to advisers, especially across a national panel, can be a resource intensive exercise, and to this end some (not all) licensees invite insurers to make a financial contribution to education and training programs,” it said.
“The financial support for such education and training programs is generally described as a ‘sponsorship payment’,” Zurich said, adding that they were “always flat fee arrangements”.
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.