Have your say: Should brokers still be paid by commission?

Have your say: Should brokers still be paid by commission?

Have your say: Should brokers still be paid by commission? Broker commissions are a subject that has come under much debate in recent months.

We want your thoughts on whether brokers should be paid by commissions or whether another way to reward brokers should be found.

With a recent survey suggesting that insurance brokers have an image problem, many have linked the cause to commission fees.

Commenting on an earlier Insurance Business story, Ex Broker, said that the time of commissions needs to end.

“I think that the time of payment by commissions needs to end,” the commenter wrote.

“Charge a fee commensurate to the work put in and the value given to the client. So often I saw two similar style policies with similar work put in but one attracted a higher premium than another due to the occupation or location so more commission was paid.

“The remuneration of brokers should not be linked to premium. If the profession wants to be respected payments need to be fully disclosed and not hidden in a statement in an FSG that state payments up to x% commission.”

However there has been some debate as commenter Broker said that commissions are not the problem.

“I do not believe that commissions are the issue. Never have I had a client complain about commission, they know we must be renumerated.”
We want your thoughts; let us know in our latest poll and in the comments below.
 
14 Comments
  • Mark 2/06/2016 10:22:45 AM
    Commissions are necessary for the lower end policy, eg house, car, small SME. Unfortunately the direct industry has commoditised these products, forcing us into a price war, consumers will start negotiating on our fees as well. No other industry has to show their income on their products, does Harvey Norman have to disclose the kick backs, margins etc he makes on each product? Why do we?
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  • Sam Greco 2/06/2016 10:59:55 AM
    Time has come to pass when client (fiduciary) relationships can be rewarded through commissions. In my view like all other commercial relationships, remuneration must be linked to economic value delivered and ‘valued’ (measured) by a client. Commissions are from last century or in closed economies. So who goes first? The industry evolves under its’ own leadership and aligns with market expectations or let government intervention drive change again!
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  • Rolf Van Dulst 2/06/2016 11:00:58 AM
    I have found that remuneration by fee provides a great deal of transparency for our clients. It requires me, as a broker, to articulate the services and benefits a client receives for the fee I am charging. Negotiating these services up front lets both the client and me to agree what is in scope and what is out of scope and what is a fair price. It takes time and effort but I believe it strengthens the long term commercial relationship between client and broker to both their benefit. It is the best way to combat transactional, price driven decision making by clients. It doesn't suit everyone but is a good differentiator to no advice, self serve, on-line options.
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