The company said it expects to be able to enable clients to save as much as 30% on the cost of life insurance although the actual amount will still depend on an individual’s circumstances.
The new commission-free policies will involve a net premium charge and an annual transparent, administrative service fee. The policies will be avaible through its Centric Wealth and Financial Index Wealth Accountants divisions.
“This first commission-free Findex life insurance product will originate from the BT Group. The group has plans to extend the range of providers in coming months once negotiations are complete with other life insurance companies,” said Michael Wilkins, chief adviser services at Findex Group.
The move follows the release in March this year of an independent review of retail life insurance advice, known as the Trowbridge report, which made a series of suggestions designed to help remove the conflicts over remuneration and advice in the industry.
The report recommended the industry limit commissions to a maximum of 20% of premiums on life policies supported by an initial advice payment not exceeding A$1,200 (£568, $889, €813) per customer. For annual premiums below $2,000, it recommended the limit be set at no more than 60% of the first year’s premiums.
“The history of the industry and its legacy systems, combined with the dominant culture of high up front commissions in the advisory industry, have been impediments to change so far,” said Wilkins.
“Findex has been looking for suitable partnerships with responsible life insurers for several years, well ahead of the Trowbridge review of the life industry, because we were concerned about the futility of high commission products in that they simply encourage churn,” Wilkins said
The Findex Group is an independently owned provider of wealth, accounting, and risk protection advisory services, with over A$17bn under advice.
