IFA/Broker rebating commssion on new term Life policy

Just out of curiosity, How much are you willing to pay?

If you cancelled the policy within an alloted period of time, the compnay would try and clawback the commission from the broker would he not? How would this work if you have it?

I always prefer to give the commission and not pay a fee, but maybe that is just me...

If you know what you want, why not buy it directly from the assurance co.?! Why, IOW, bother paying for an IFA at all?

Marcus

Contrary to popular opinion, buying direct does not get you the best deal. In general, the premium quoted by an insurance company is the same whether you buy it direct or via an IFA. The same is true of unit trusts. If you buy direct the unit trust company gets to keep the commission it would otherwise have paid to the IFA.

However, the IFA has it in his power to reduce the premium by rebating some or all the commission. This is, broadly, the only way you'll get a reduced premium. Brokers who do this for investments are knwon as discount brokers and give away some or all the commission they get.

Also, you may be interested to learn, reducing the commission on a life policy does not make a fantastic difference to the premium. So the best way is for the IFA to take the commission and pay some to the client. But then, if the client stops the policy before about 4 years have elapsed, some commission is clawed back by the insurance company. So the IFA is left holding the baby. So, if he's wise he pays the client the rebate on the drip, as the clawback liability decreases.

Rob Graham

In message , Marcus writes

Very few LifeCos will deal direct because of the compliance overhead.