One of Andep’s policies is that we never accept any commissions on insurance policies we establish for clients or for existing policies brought to us by new clients. For new policies, this usually results in roundly a 30% discount on the premiums. For existing policies, some insurers allow us to “dial down” commissions to zero and this saving is passed on to the client in the form of a discount equal to the commissions that would otherwise have been payable on their ongoing premiums (usually between 10% and 30%).
Mr Brown* is a 52 year old professional with a significant income but also significant debts. As such he has high levels of insurances for income protection, disablement, death, trauma and business expenses. These insurances were all set up by a previous adviser who, like most advisers, takes commissions on insurance products.
For Mr Brown’s policies the insurer was unable to dial down the commission to zero. Since Andep refuses to accept commissions (for ethical as well as conflict of interest reasons) these commissions are deposited in our trust account. Twice per year they are rebated back to the client less a $16.50 administration fee. In the case of Mr Brown, his annual premiums were $17,850 and Andep was able to rebate back to him $1,965 in commissions in a single year.
*name has been changed to protect the client’s privacy.