AMP cans free trips for insurance brokers
Glitzy overseas trips offered as incentives for insurance advisers could be on their way out.
Many insurance companies offer international trips, often flying business class, to advisers who place a lot of business with them.
Destinations include Greece, Hawaii, Dubai, Morocco, Fiji and New York.
Partners Life made headlines when it sent its advisers to the Playboy Mansion. Now, AMP has announced it will no longer offer overseas trips as a bonus to highperforming advisers.
It follows a Financial Markets Authority (FMA) report into ‘‘churn’’ – clients being moved on to new insurance policies when they did not need to be.
It sanctioned 11 advisers and said it was investigating another three. Half of the 24 advisers it reviewed as part of its work lacked care and diligence in their advice and most did not recognise the conflicts of interest that could be caused by the high upfront commissions they were paid, and the international trips they could qualify for.
The FMA called for insurers to look for better ways to remunerate their advisers, that were more in line with consumers’ interests.
AMP managing director Blair Vernon said it had decided to stop offering its ‘‘offshore development programme’’.
‘‘While there has been significant value in offering this programme given its principal focus on professional development, we believe programmes of this type, where qualification is still influenced in part by volume performance, are no longer appropriate.’’
Sue Chetwin, chief executive of Consumer NZ, said it was something she was worried about.
‘‘I don’t see that anything has changed. They’re not getting new people buying insurance, just churning the existing ones on to more and more expensive products that may or may not be any good and getting huge commissions.’’
But FMA chief executive Rob Everett welcomed the announcement.
He said it showed the industry stepping up to focus their efforts on better outcomes for consumers.
The authority would next month publish a report on its review into insurance providers’ soft commissions and incentives. This year it would also review bank incentive structures.
The insurers do not disclose on their websites where the advisers go on these trips.
The current law means that registered financial advisers – which most insurance advisers are, do not have to disclose it. Law reform currently under way may change that. –Stuff