AMP Limited has moved to change remuneration structures around its life insurance offerings ahead of any moves resulting from the Trowbridge recommendations.
The company announced today that it would be reducing upfront commissions on new life insurance products, capping year one commissions to 80 per cent and a 20 per cent annual commission payment.
As well, it said AMP advisers would have access to the one year commission only once every five years per policy, and that it's licensees' approved product lists would move to a similar remuneration structure with all life insurance products complying with the new model and the five year rule.
Confirming the changes today, AMP chief executive, Craig Meller, said it was clear the life insurance industry needed to reform in order to help restore customer confidence.
"We have consulted with adviser associations to develop these reforms — they also recognise that change is required to build trust and secure long-term benefits for our customers," he said.
Meller said AMP would support advisers through the transition and was committed to developing technology and systems which allowed advice to be delivered more efficiently."
Comments
Great move. Bit surprised it came from AMP first, but hopefully this kicks some of the others into gear and kills off the Trowbridge recommendations on adviser remuneration
So AMP has decided to become the first martyr.
AMP, why stop there.
Why don't you implement the full Trowbridge recommendations.
By the way in the client interest don't forget to compensate the clients by reducing all your premiums or wasn't that part of the arrangement.
Then watch your insurance revenues flow elsewhere whilst the others wait and watch to see what happens to your business inflows and outflows
If no one else follows AMP, then plenty of scope for examination of the client's best interests and whether AMP products will be too expensive (especially when savings on advisers' remunerations are not passed on to clients). Maybe the chosen few top AMP advisers (Sales people) will still be getting their over rides UP FRONT!
And will AMP add an interest payment to commissions to compensate advisers for loss of up front cash flow? Not likely! Couldn't afford it, could they. But presumably execs will be overseeing higher profit and benefitting from higher bonuses. Talk about self interest! Punish advisers and feather your own nests! Reeks of Industry Funds' culture.
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