“In the long-term if they did that [regulators capping commissions] it’s better for people who are established agents. I’ll end up making more money,” says Chilliwack-based certified health insurance specialist Ken MacCoy. “If you’re new to the business and you’re trying to go it alone it isn’t going to happen unless you get hooked up with someone like me [experienced agent].”
MacCoy was speaking to a report from Australia that suggests the government there is days or weeks away from introducing capped commissions on life insurance policies, something LHP discussed
back in April when the Trowbridge Report was released recommending capping commissions at $1,200 in the first year and 20 per cent of the policy value for the duration of the contract.
Don’t think it’s going to happen in Canada?
“In the insurance world in Ontario, B.C., Quebec and Alberta, we are about to go through a review of the regulatory process,” says Lawrence Geller, president of Geller Insurance Agencies Ltd. “There is an expert panel that’s been struck to review FSCO. They have a mandate which includes the question of commissions.”
For young advisors MacCoy suggests another possibility which is to join one of the large, established insurance carriers, who have a captive sales organization.
“Anybody that’s younger that’s getting into the business, because of the fact the MGA channel and most of the insurance companies don’t have a sales force,” suggests MacCoy, “if they were to come to me I would suggest they go with Sun Life or London Life if they’re interested in the insurance side.”
Regulatory moves on upfront commissions would significantly impact an important segment of the advisor pool.