Dealer group Genesys Wealth Advisers is negotiating with competitor dealer groups interested in joining its newly launched preferred partners program with insurers.
The Challenger Financial Planning subsidiary is also sounding out its four current preferred partners for their views on expanding the preferred partners program to include additional dealer groups.
There are no plans at this stage for Genesys to expand its list of preferred insurers in the program.
The program was launched in October 3, last year, after completion of a tender that saw Genesys select four insurers — Macquarie, CommInsure, Aviva, and Tower — from a total of 11 short-listed applicants.
Challenger Financial Planning chief executive Greg Kirk confirmed that Genesys has “been approached by some of our competitors and interested parties from other segments” to join the program.
Kirk told Money Management that these unnamed dealer groups had “expressed an interest in what the program means for helping to reduce the underinsurance gap in Australia, and in joining us in the program”.
The program is “simply a partnership intended to tackle underinsurance in Australia, which is partly due to the industry not writing enough of it [insurance]”, he said.
“Our aim, therefore, is to enable advisers to write more business by designing products that are more appropriate for our clients at an appropriate price, with appropriate levels of complementary legal policies.”
At the same time, Kirk acknowledged the program “inevitably entails increased flows going through to the preferred partners as an outcome of the closer relationship”.
“If advisers better understand a particular policy then the natural extension of that is more business volume being written for the companies in the partnership.”
Challenger’s public listing prevented him from commenting on individual flow volumes through the program, he said, but “what I can tell you is we are very satisfied with the (overall) volumes”.
A feature of the program is the inclusion of a three-year ‘responsibility period’ on sales, as opposed to the customary one-year period in the insurance industry.
“We were able to say to the insurers that we were confident that the business our planners write will be sticky, thereby securing a higher level of upfront commission than the market rate.”
In the so-called ‘responsibility period’ in insurance, the life industry normally gets 100 per cent of the premium upfront as commission.
