Life advisers who sold BT Life policies attaching to BT SuperWrap prior to the middle of 2012 have been told that commissions they believed had been grandfathered will be switched off as of 1 January, 2021.
The advisers have received calls from BT Life business development managers and have received a communication from the company informing them of the situation which is due to policies written before 22 June, 2012, now being regarded as having offered under a group policy.
The decision that the policies were technically deemed to be part of a group policy means that the commissions received by the advisers are not subject to grandfathering and will be switched off effective from 1 January, 2021.
Some advisers were informed of the decision by BT more than a week ago, while others received notification only this week, leading to complaints that they have not been given sufficient notice to address the issue with their clients.
Similar decisions with respect to grandfathering have been taken by AMP Limited and Colonial First State.
Advisers have told Money Management that the decision around the status of the pre-2013 commissions will have a significant impact on their income, with some suggesting it will act as a catalyst for exiting the industry.
A spokesperson for BT Life said that Protection Plan policies offered in Westpac MasterTrust or SuperWrap with a risk commencement date before 22 June 2012 were individually underwritten but offered under a group contract as disclosed in the policy document.
“All types of commission on these group contracts must cease on 1 January 2021, as required under the legislation,” she said.