Fidelity Life has revealed its new commission model, which will allow some advisers to receive a portion of their commission when they submit new business.
The new model will be based on a commission scorecard, and focuses on three key factors - persistency, in-force policy count, and conversion rate. Each adviser’s final score will determine how much upfront commission they can receive.
Chief distribution officer Adrian Riminton said the change aims to make the commission process more transparent and efficient, and it will mean some advisers can be paid weeks earlier than the current industry standard practice.
“This is part of our broader transformation which we’ve been undertaking for the last two years at Fidelity Life,” Riminton commented.
“The fundamental change is really about trying to drive simplicity, transparency and consistency by creating this new scorecard model. It’s designed to ensure that it’s sustainable from our perspective and for the adviser, while also delivering good outcomes for customers.”
“Our old model had been built up over a number of years,” he explained.
“There have been some small variations over time, but what we’ve tried to do now is consolidate all of those into one simple and transparent model.”
The new model is set to come into force in July 2021, and Riminton said advisers will be able to see their individual scores for each factor, along with the commission payments that they are eligible for. He says advisers were consulted throughout the process, and offered feedback at key decision making stages.
“We’ve taken on adviser feedback in formulating the definitions of those three metrics, and also the level of weighing applied to each one,” Riminton said.
“Our approach is a very simple one with only three criteria, and that really differentiates it from the other models in the market. It’s all about simplicity, transparency and good outcomes for customers.”
