Click cuts jobs and scales back operations
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Non-advised protection firm Click has cut over 50 jobs in its Farnham and Manchester offices as it scales back its term assurance offering with immediate effect.
In a shake-up for the firm’s business model, Click will move away from indemnity commission and move to earned commission.
The company says it will instead focus on its internet offering, its general insurance brokerage and call centre operations. It also says it will concentrate on developing a term assurance business that is consistent with the RDR.
Money Marketing understands that sales staff at the firm were sent home last Friday.
Joint managing director Ray Flannery says: “The recent actions of life offices have highlighted the indemnity treadmill that Click and most brokers are on.
“Our intention is to move to an earned basis of commissions to position ourselves for the impacts of RDR. We expect the IFA sector to shrink by 50 per cent and for Click, or anyone else, to take advantage of the resulting numbers of unserviced consumers, changes will need to be made.
“Our industry has challenges with indemnity commission but, unfortunately, progress is painfully slow. We look forward to addressing these challenges in the future and emerging all the stronger for doing so.”
In May Money Marketing revealed that Click owed Fortis £900,000 in clawback, after setting up a payment plant to repay £1.2m of indemnity commission on lapsed policies.
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Readers' comments (28)
Anonymous | 22 Nov 2010 11:44 am
Shame the article doesn't expand on those "recent actions of life offices" that Mr Flannery mentions. If a firm needs new Indemnity Commission on new sales to pay clawback on past sales then its business model isn't sutainable - it's only a matter of time before it's hit with clawback bills it won't be able to pay.
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Julian Stevens | 22 Nov 2010 12:00 pm
For an operation the size of Click, non-indemn really is the only sustainable long term modus operandi. You'd have thought that with only a bit of forethought, they'd have realised that from the word go and not now owe £900K in clawbacks.
Presumably, virtually none of these non-advised life insurance policies has been effected in Trust, so the tax man must love all the IHT revenues Click's business will generate, whilst widowed spouses will be hardly delighted at having to wait many months to be able to access the policy proceeds.
But hey, if its cheap it must be good.
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Anonymous | 22 Nov 2010 12:21 pm
When you sell them cheap and stack them high what did you expect Click..
It's not rcocket science.. Our 'Advice base brokerage has about a 7% clawback rate at the moment..Which most is out of our control..
Maybe a bit more advice would have reduced your clawback, and aybe explain to your customers that they have 'Terminal Illness instead of Crtical Illness'......
I'm sure they will be fine though, just change your name or get all of your employee's to be an AR's or somethinig and maybe go down that route? Sounds familar?
DT
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Toni | 22 Nov 2010 12:52 pm
Dear Anonymous
You quite clearly have little confidence in the figures you are quoting relationing to YOUR companies clawback persentages, otherwise you would have noted the company and your name.
While I believe changes need to be made to a business model to keep it upto date and sustainable, I am very annoyed you seem to be implying that staff working for Click are to blame for miss informing customers on their life insurance.
All Click staff work very hard to provide customers with a service to either renew their Insurance or set up a new policy. We are always compliant and aim to provide the consumer with exactly want they feel is suitable for their needs.
Actions behind the scenes have nothing to do with sales consultants.
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Anonymous | 22 Nov 2010 2:09 pm
I have to say from my experience working at click the sales staff only follow what they have been told. They are fantastic people to work with unfortunatly the same cannot be said for the Management who in this instance do not know how to keep a business afloat and therefore have now ruined christmas for a lot of people (I must point out this is more than the 50 mentioned in the title).
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Anonymous | 22 Nov 2010 2:13 pm
I'm quite confident on our figures in relation to our clawbacks.. We monitor them.. and this helps them remain low.
On the rare occasions that clawbacks do occur, the customers are usually unemployed, or do not require cover any longer.. We feel that by giving advice, keeps clawbacks down.. The customer is happy, and will not look elsewhere to save £1. And more importantly, we know we have treated the customer fairly..
I'm not saying that the staff at Click do not work hard, that's not my business. It always seems to be Click who we come up against in today's market, and 'sometimes' the customer seems to think they have ''illness'' cover at £8..when you kindly try to explain that seems to be Terminal Illness.. they clearly think it's Critical..
The amount of times that I have tried to sell a BUPA policy to someone, only to be told, ''The guy I spoke to said it's a poor contract.. And you should go with this FORTIS or AVIVA one..??? ''
BUPA is pretty good I think..
Not ALWAYS Click to be fair.. But we come across this frequently and is very frustrating..
Maybe giving advice is the way to go? Just a thought..
If I'm mistaken, please accept my apologies..
Every one is entitled to their opinion.
DT
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Anonymous | 22 Nov 2010 3:16 pm
I have to agree with Toni, the staff at click are only doing what they have been told to do by the management. From my own experience there I have to say that the management tend to be very ill mannered and have very little business knowledge when it comes to forward planning. For example whilst there the idea of re-writting policies for customers using a different company just because click dont like that company does not bode well. And I must say that my heart goes out to all of those staff at this time of year who will be losing there jobs because of this. (and it is more than 50 staff members).
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Ex Click | 22 Nov 2010 8:17 pm
I used to work and Click and I must say I'm not surprised by this news. The writing has always been on the wall purely based on their business model. The model is great if your sole intention is to grow the business rapidly, make it look profitable and get out before anybody notices it's true underlying value.
Certainly when I was there the emphasis was on quantity and not quality and, in light of what has happened, this has probably not changed since. When you offer large bonuses for hitting targets and severe punishment, in the form of disciplinary action, for meeting or not meeting targets (with more emphasis on stick than carrot) then of course people are going to hit their targets, nomatter what (any bankers reading this?).
In the real world I would question the methods of anybody who regularly does 100% or 200% more business than the average. At Click they get promoted.
So it would seem that the lunatics have been allowed to run the asylum for too long and the upper management have failed to get out when they had the chance.
I only feel sorry for the staff who have been treated as a commodity in much the same way as Click have been allowed to treat their customers for so long.
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Anonymous | 23 Nov 2010 12:53 pm
without being rude and cruel as its not nice to lose a job and my thoughts for the staff, however about time something happened to Click I hate the model of Click! leave it to the financial advisers who work their backsides off to get the proper work done!
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James | 23 Nov 2010 1:29 pm
Toni
In response to your reply to 'anonymous' 22 Nov 2010 12:52 pm, my humble opinion would be that the reason the busniess is not sticking as much as the business model needs, is more in relation to your statement:
'We are always compliant and aim to provide the consumer with exactly want they feel is suitable for their needs'
That is what most people believe is the biggest issue, the consumer is not in a position to know exactly what is suitable for their needs, they may think they do but do not have the knowledge and experience of advisers in order to justify 'why' they think that, which results in them changing theor mind when they see something or speak to someone else that entices them away from their Click policy.
Hence why most of the industry is serviced by advisers.
But to put my hand up, I am new to the industry so this merely my opinion.
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