AMP has announced reforms to its remuneration policy for advisers licensed by its dealer as well as IFAs that recommend AMP life products.
The company will adopt a new payment structure that will reduce upfront commissions on all life insurance policies to “80 per cent and a 20 per cent annual commission payment during the life of the policy”.
In addition, AMP will mandate that its advisers only be able to access the year one commission every five years per policy, “irrespective of the life insurance provider and applies to all insurance policies written since 1 July 2010”.
The new hybrid structure will apply to both “AMP licensed advisers and non-AMP licensed advisers (including independent advisers) when distributing AMP life insurance products”.
“It is clear the Australian life insurance industry needs to reform in order to help restore customer confidence,” said AMP chief executive Craig Meller.
“This confidence is essential for AMP to achieve its most important objective – offer financial advice to help people improve their lives. These changes, which are initial steps towards a fee for service model, support this objective.”
More to come.