Pre-empting the push from Assistant Treasurer Josh Frydenburg for the industry to fix itself, Synchron has taken practical steps to resolve the adviser remuneration issue by designing an innovative product structure.
Synchron director, Don Trapnell, said Synchron’s recent fact-finding mission to the UK provided the inspiration for the solution. “We noticed that in the UK, most policies are written on a level premium, set-term basis,” he said. “We have designed a product structure along similar lines and have put it out to tender to select life insurers.”
Mr Trapnell said initial interest has been excellent with three insurance companies indicating strong interest in moving forward from design to costing phase and another coming forward and asking to be involved.
“The structure we have designed provides the ability for the adviser to personalise the product to the specific needs of the client,” Mr Trapnell said. “The product will have a number of level premiums and will be for a set term. Premium structures at first indication are comparable to current yearly renewable term rates and remuneration will be structured so there is flexibility to enable an adviser to mould the revenue to suit the effort required to secure the business.”
Mr Trapnell said he believes Synchron has designed a product structure which benefits parties – advisers, licensees, insurers and most importantly, the consumer.
“The industry is changing at break neck speed,” he said. “While we are pleased by recent announcements from AMP and Centrepoint, there are other levers that need to be pulled and addressed. At Synchron we believe it is up to us to not just follow others, but to take on a leadership role. The product structure we have designed goes a long way towards doing just that.”
Mr Trapnell and Synchron independent chair, Michael Harrison recently visited the United Kingdom (UK) to study the life insurance advice industry and the effects of the Retail Distribution Review (RDR) in the UK.
Source: Synchron
