Persistency the key in new OnePath remuneration model

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OnePath is altering its adviser remuneration to place a greater focus on persistency, with a new remuneration model that "effectively tops up the amount of upfront commission paid."

Thursday, November 3rd 2011, 2:03PM 2 Comments

"This is creating quite a heavy weight towards persistency with remuneration," said OnePath adviser distribution general manager Jeremy Nicoll.

"Your level of remuneration is going to be linked a lot closer to your level of persistency."

As persistency is based on a rolling 12 month figure, the company said it would move to a transitional model from January 1, 2012 to September 30, 2012, before moving to the new model on October 1, 2012.

Under the transitional model, advisers with a 93%-plus persistency will receive a high persistency payment of 10% of the initial commission paid, with a 5% persistency payment for those with a 91% persistency.

Advisers falling below the 91% mark receive no persistency payment and those below the 83% mark will see their upfront commission change to 50%.

The new model, effective from October 1, 2012,sees upfront commission based on an 85% or above persistency, with upfront commission changed to 110%.

It also differs from the transitional model in three other ways; commission payable (both upfront and bonus) is based on persistency and production at the date of application submission, there will no longer be a high persistency payment, it will instead be embedded in the bonus commission and the bonus commission will replace the quarterly bonus and the high persistency payment, being rolled into one bonus, payable from October 1, 2012.

Nicoll said OnePath was keen to work with advisers whose persistency levels were below the bonus thresholds over the 11 month transitional period, utilising their Helping Hands programme, customer retention team and a number of tools for BDMs to help advisers.

OnePath also announced a series of product enhancements including a parental loyalty benefit that was developed as a result of adviser feedback.

"That was actually suggested to us by an adviser in June, and that was something we've managed to turn around in six months."

He said the company valued adviser feedback as they are the people that "have that direct relationship [with clients], they're in the field every day, at the coalface."

The company has also announced a number of premium increases, effective from December 1, 2011, with life cover rising 3%, trauma cover 2.5%, income cover and business income products 3%, complete disablement cover 3% and major medical cover 12%.

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