Non-aligned dealer Madison Financial Group has come out in support of AMP’s change in remuneration structure on its insurance products.
Madison Financial Group’s General Manager, Giulio Russo, applauded AMP for leading the way and coming out with a sensible outcome.
“In our submission to Trowbridge we advocated that high upfront commissions were a thing of the past but also suggested there still needed to be a range of remuneration structures for the advisers to choose from.
“AMP’s proposed structure is the type of response we were hoping for and we now encourage other product providers to adopt a similar approach.
“Providing the products stack up and meet our clients’ needs, our advisers will support those product providers that have flexible remuneration structures in place.
“We currently have a broad approved product list of insurers including AMP so we are hopeful that we can retain existing arrangements. However, product providers must offer remuneration structures that are sensible and commercially viable.”
Madison Financial Group believes that competitive forces will ensure that most insurance companies will follow suit and that this bodes well for the industry.
“However, we also challenge insurance companies to be more client centric and innovative in product design. What would be even more market leading is, say, a 10% reduction in premiums as well.
“This is a perfect opportunity for them to really help address high lapse rates. For example, why not reward clients who stay with insurers for three years or more via a rebate or reduced premiums.
“The adviser will need to take this into consideration when reviewing client policies, therefore ensuring the client’s best interests.
“The disappointing thing in the industry is that there has been little product innovation to encourage consumers to take out insurance and retain it once they’ve got protection in place. Let’s hope we see some innovation going forward.”
Source: Madison Financial Group
