[Opinion] Getting it off at the Playboy mansion

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There's nothing too sexy about selling life insurance, except maybe a trip to the Playboy Mansion in California. Unfortunately that opportunity has gone thanks to the mainstream media. Here's our take on the recent Herald article on offshore junkets.

Wednesday, July 31st 2013, 9:56PM 4 Comments

by Philip Macalister

I read Naomi Ballantyne’s email to advisers on Friday warning about an upcoming article in the Herald on Sunday with, let’s say, some interest.

It would be fair to say that on Sunday morning instead of checking who won the Brumbies v Bulls game overnight I went looking for this article.

I found it pretty quickly (without even having to get out of bed thanks to mobile devices) and then wished I’d gone to the sports pages instead.

The Herald article was, in my opinion, a poor piece of journalism. Indeed calling it journalism is an insult to professional writers. It was a sensationalist, tabloid piece of trash which was more suited to the News of the World rather than the NZ Herald.

Clearly the writer didn’t know much about insurance mixing up life insurance with general insurance.

Also you can hardly argue they are well-guarded secrets. All the companies, except OnePath (no surprise here), were willing to share information with the writer.

There is clearly a debate to be had around the issue of soft dollar commissions. My view has been that they are OK on the proviso that the client is fully aware of what is happening.

I have no doubt many advisers do disclose these things. I also have no doubt that many people who sell me other products have similar incentives and do not disclose these to me at time purchase.

Before this story was published in the Herald I had some discussions with various life company chief executives about these trips.

Their defence, or rationale, for them can be summed up as follows.

One of the first comments made was that the cost of the trips, although appearing expensive, was actually quite cheap.

Put another way, if the money spent on the trips was instead paid as extra commission to advisers then the increase in commission levels would only be a couple of percent.

Arguably that increase is so small it would not be noticeable and certainly not enough to influence behavior. (Read sell more product).

On this count, it is claimed, it’s money well spent.

Secondly it was away of getting advisers away from all the market noise (read slagging off from other competitors) and getting messages across to advisers.

The other point is that it’s not all concerts, visits to the Playboy Mansion and parties. There is some educational stuff in there too.

However, as I’ve never been on one of these trips I don’t know what they do.

The offending article

Playboy treats for insurance salesmen

What others say

• Russell Hutchinson NZ Herald gets it completely wrong on Playboy mansion story
• David Whyte Playboy's role in NZ financial services

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