Independent, Whole of Market or Panel

Madjock

When our clients lapse on life policies we get a commission clawback from the provider, so we either claim this from the client or arrange another policy for them.
As for fee charging, some our advisers charge broker fees, some just get the proc fee. It's not always that black and white as to how much work a case will involve. The more adverse cases take up a lot of us admins' time so tend to have fees added, but then again, a Halifax or Nationwide can turn into a monster. I have a Nationwide case which I have been dealing with (offered 6 months ago, and due to expire) for 13 months, and all we will get from that is a small proc fee.

MortgageMamma

I've charged a fee 3 times and felt guilty for it every time

And once I charged and rebated and still felt bad about that somehow, but I do see it as a viable option - however if possible I really want to stay fee's free. I went to a network meeting not so long ago and nearly every broker I spoke to was fee's free which suprised me

I've got to admit I do worry about life assurance clawbacks, as sometimes it can be quite a lot of money and not everyone is in financial position to be able to take it on the drip - I've head of advisers reclaiming the clawback from the client but surely that must be almost impossible, I mean, do they not just tell you to get lost? Has anyone tried to incentivise clients with their life insurance policies, say rebating them one premium every six months on a 2 year plan?

dunstonh

When our clients lapse on life policies we get a commission clawback from the provider, so we either claim this from the client or arrange another policy for them.

Dont take this the wrong way but I feel that is a disgrace (claiming the clawback that is). The exception being that when a formal fee has been agreed, with fee agreement signed that that the commission is being used to cover fees. The commission taken should match the fee exactly with the premium lowered. Otherwise it is not treating customers fairly and a court is very unlikely to award the adviser the money without a fee agreement.

I've charged a fee 3 times and felt guilty for it every time

Why? How many hours work did you do on those cases? Was the amount you charged fair? Do you want to do it for love?

I've got to admit I do worry about life assurance clawbacks, as sometimes it can be quite a lot of money and not everyone is in financial position to be able to take it on the drip

I know one adviser that is no longer trading and lost his house because of clawbacks. He did everything on indemnity basis and suffered a few big clawbacks in quick succession. He couldnt afford it.

Get away from indemnity as soon as you can. Start with a few cases a month going on non-indemnity and increase gradually until you do them all. Remember you also get paid more on non-indemnity.

I've head of advisers reclaiming the clawback from the client but surely that must be almost impossible, I mean, do they not just tell you to get lost?

Dont do it. It doesnt sit well with TCF unless it is done on a formal fee basis and the charge is reasonable. A decent firm wouldnt do it.

Has anyone tried to incentivise clients with their life insurance policies, say rebating them one premium every six months on a 2 year plan?

Why not lower the commission and lower the premium from the start. I know network size has a lot to do with how good your life policy pricing is so if your network has arranged best pricing then small discounts on commission can make the premium very good value.

homer_j_3

I think what MM was saying about rebating premiums is that its an incentive to keep them going so when you do take the larger commission, you lessen the risk of them coming off.

MortgageMamma

OK in answer!

1. Dunston, I'd do anything for love ;-)
2. I've no intention of charging my clients for clawbacks, I do agree its somewhat unethical but I am curious as to how firms actually get away with it
3. Thanks for the advice on switching to NI, I will do as soon as I feel able, I'm particularly risk averse!
4. My network would not let me rebate commission - I had enough trouble getting them to let me take my own PHI and life policies on nil commission!
5. Homers hit the nail on the head. Some clever person said to me last week that one way of keeping a client paying a premium was to pay it for them on certain points of the contract rather than a commission sacrifice - anyone done this before? what are your thoughts?

dunstonh

2. I've no intention of charging my clients for clawbacks, I do agree its somewhat unethical but I am curious as to how firms actually get away with it

They use scare tactics. "if you dont pay, we will go to court".

4. My network would not let me rebate commission - I had enough trouble getting them to let me take my own PHI and life policies on nil commission!

What were you saying about your network being really good?

It's your business, you should be allowed to do what you like. You know that some insurers insist that own policies should be taken on nil commission basis?

How would the network know if you have taken less commission than 100%? When you use Assureweb or Exchange just put 75% in the commission box. Premium goes down and commission goes down. No rebate involved.

MortgageMamma

Ah right I see well threatening court action because the no longer want or can afford a policy is not right - those sort of tales put people off purchasing through an intermediary and drive them to take their policies with ASDA to their detriment

Re the commission rebate - we use a system called intelligent protection and lifequote, and try as I might I cannot find anywhere to sacrifice commission

I don't regret joining my network though, they are great - I cant imagine ever going DA - commission sacrifice is not an option for a seedling business, anyway - I'll just switch to non indem as soon as possible. I've had 3 clawbacks in two years and each one put a hole in my pocket - and oddly enough they were clients who all had money and I didnt expect to cancel plan. The poorer clients still have them running!

dunstonh

Re the commission rebate - we use a system called intelligent protection and lifequote, and try as I might I cannot find anywhere to sacrifice commission

I take it that they are an internal system. I havent heard of them. The most common quote portals are assureweb, exchange and webline. Assureweb and Exchange being the big two.

Assureweb is free to use so you could register with them. Exchange is about £15pm. Both have the option to tweak quotes with reduced commission taken.

MortgageMamma

I've used all three of the systems you mention before but I think intelligent protection is much better in some ways - lifequote/aka intelligent protection are owned by skipton group hence the offering

One good thing about the process it that we do not have to go through a full disclosure life app with a client - just a shortened one and then the company call them on the phone and do the medical questions so it keeps us clear of non-disclosure claims in the future

You do still have to ask a few general questions about health though to ensure you recommend the right provider in the first place!

Madjock

The clawback we claim from clients who lapse their policies is only in the first 2 years, and very often it's only a few hundred quid. Our clients know this will happen when they sign the paperwork.