by Susan Edmunds
From October 1, advisers with net annual new premiums up to $24,999 will be paid 150% in upfront standard commission.
Between $25,000 and $49,999 the rate will increase from 105% to 165%, between $50,000 and $99,999 it will increase from 170% to 180%, and advisers who place more than $100,000 in net annual new premiums in a December 1 to November 30 year will be paid 200%.
Advisers will also receive commission for renewal business, regardless of their production level, of 5% for year one and two, 7.5% for years three and four and 10% for five and over.
AIA has replaced the optional renewal commission with “Pendulum commission".
AIA says that advisers could choose to swap their commission structure for this option on a case-by-case basis. It gives much higher renewal commissions, which improves the value of an adviser business.
Pendulum gives upfront commission of 110% and then annual renewal commission, after year two, of 25%.
AIA chief executive Wayne Besant said it was a small adjustment to the commission structure. “It’s not a radical overhaul but it’s to make sure we’re relevant in the IFA market.”
AIA has also changed its clawback structure. It still applies for two years, with 100% clawed back in the case of a cancellation in the first 12 months, 50% in the next six months and 25% in the following six months.
Sales manager Graeme Edwards said the new structure was designed to be simpler.
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Commission is just a start and we look forward to the improvement coming in underwriting, claims and product. The market is always better off with active competition especially when underwriters life the game to grow their business.