PrefSure cuts distribution focus to core group
By Jason Spits
Risk insurance group PrefSure Life will cut its ties with up to 1,500 financial planners, choosing instead to focus on a core group of 45 advisers, saving $3 million in expenses, as it shifts towards becoming a specialised product provider.
PrefSure Life managing director Geoff Black says the group would still offer life insurance products through master trusts, but its one-on-one dealings would be concentrated on the small group of advisers.
Black says PrefSure would also maintain existing relationships with dealer groups and selectively grow the base of advisers.
According to Black, the move has come about after PrefSure examined the business written with the group and found the 1,500 advisers it was dealing with only placed, on average, five new proposals for business each year.
In comparison, the 45 advisers identified by PrefSure have written a total of $9.5 million in new business in the past year alone.
“We will confirm with each adviser if they will not be acting with us in the future and emphasise we are looking at making adviser relationships narrower, but deeper,” Black says.
“The move must be considered from a commercial stand point, and we will still pay commissions and support existing policies, but for many advisers, we have to question if they know our products or even use them,” he says.
Advisers accessing platforms with PrefSure products will still be able to access the group’s life, disability income and group life policies, with Black stating Prefsure has already signed with 10 platforms. Business through this channel has grown at 30 per cent per year.
The new distribution focus, effective from today, will be introduced as part of a series of changes in the new financial year, which follow on from the sale of the group’s NZ business and the adoption of the specialist risk insurance strategy.
“The Financial Services Reform Act (FSRA) has changed the market and we have chosen not to be all things to all advisers. There will be some short-term pain as we lose some business, but we have decided to move out of the main market.
“This is consistent with the complexity of risk insurance and the compliance and legal pressures advisers face under the FSRA, as well as a demand for an insurer that specifically deals with advisers who are not part of professional distribution groups, which will be our new niche,” Black says.
AUTHOR
Jason Spits
Recommended for you
Net cash flow on AMP’s platforms saw a substantial jump in the last quarter to $740 million, while its new digital advice offering boosted flows to superannuation and investment.
Insignia Financial has provided an update on the status of its private equity bidders as an initial six-week due diligence period comes to an end.
A judge has detailed how individuals lent as much as $1.1 million each to former financial adviser Anthony Del Vecchio, only learning when they contacted his employer that nothing had ever been invested.
Having rejected the possibility of an IPO, Mason Stevens’ CEO details why the wealth platform went down the PE route and how it intends to accelerate its growth ambitions in financial advice.
