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Sesame Bankhall will look at loaded premiums

Cupis: ‘Reviewing all options’

Sesame Bankhall is not ruling out negotiating loaded premiums for its advisers as it carries out a review of its protection and general insurance business.

Money Marketing reported earlier this month that the protection industry is divided over loading premiums, where providers are asked by distributors to inflate premiums to pay higher commission.

Sesame managing director of mortgages and general insurance John Cupis says following the merger of Sesame and Bankhall last year, the group is now carrying out a review of its protection and general insurance business.

He says : “Insurers load premiums for certain products and certain channels. It would be right to review all the options available as part of our protection business review but we have made no decisons on what route we are taking. We are undertaking a general review of the market and trying to understand what options we have got to create the best terms for our broad adviser base.”

The review is expected to complete towards the end of the year and advisers will be consulted during the process.


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There are 14 comments at the moment, we would love to hear your opinion too.

  1. My concern with loading premiums is that we need to cost effective in such a price sensitive market & most people are familiar with search engines on the internet and if they feel premiums are high they will look elsewhere.

  2. If premiums are loaded the concept of treating customers fairly goes out of the window. The idea seems to fly in the face of TCF and gives further ammunition to the commission abolision lobby.

  3. Why not go the whole hog? Get yourself a two year indemnity agency with mmmmmm Scot Prov. Negotiate a loading for commission purposes. Then negotiate an increment in commission for advance payment of 2 years premiums and sign the clients up for a 2 year Premium Credit facility. Repeat every 2 years.

    It happens.

  4. I switched from a single tie to multi provider nearly 3 years ago as I found my persistancy rate was dropping. In my experience it is better to have a smaller bite of the cake but get to keep it. More and more are shopping around and all networks need to be as competitive as possible to keep their AR’s in business. I am not part of Sesame but they need to be very careful. AR’s can shop around as well!

  5. I agree with S Rogers. Sure Sesame Bankhall Advisers don’t have to hold themselves as ‘independent’ for GI, but in a search engine world most canny consumers would think they had been ripped off and would merely cancel the policy and go elsewhere….. for life cover this is one thing, but for CIC its certainly a bigger issue.

    TCF is potentially a huge issue here, but so is the integrity. If Joe Bloggs went to see a Sesame Bankhall adviser who tried to flog him a more expensive policy to trouser more commission [sounds like the Bankassurers!], would Joe still trust that adviser with his pension, investments etc? No, of course he would not!

    Look at the wider picture people!

  6. Has Sesame actually denied that it is not doing this already? On its narrow/representative protection select panels, for example?

  7. Where I see this heading is that the cost of advice on protection business has to be separated from the cost of implementation.

    I appreciate that it’s very difficult to get people to pay a fee for what they see as little more than “just getting together a few quotes”. But consider the alternatives. Do you get into a Dutch auction and end up with tuppence ha’penny commission just to get the business? Or do you do all the work formulating a properly considered set of options with costings, on a purely speculative basis, only then for your prospect to go online to find what he’s chosen from the options you’ve presented at the cheapest price available? That simply isn’t a sensible or sustainable business model, is it?

    If you believe that the knowledge and advice you have to offer are very much more than just getting together a few quotes, then you’re going to have to quote a fee for it and accept that quite a few prospective clients won’t pay which, when you think about it, is effectively insulting your professionalism.

    As for commission, my view, as stated previously, is that this should be adjustable, as is already the case with many pension and investment products.

    Alternatively, you can muddle on as you are. But hey, what do I know?

  8. As a Directly Authorised adviser using the Sesame Bankhall network, I would be very concerned, if they went down this route. It could very quickly damage my reputation with clients who have always trusted me to source the best deals for them & if there were any suggestion that I was improving my financial position at an additional cost to them, I can see them questioning my integrity.
    Completely agree with S Rogers re ammunition to anti commission lobby, which is last thing we want.

  9. We pride ourselves in giving impartial independant advice. We search for the best deals for our clients.

    Let the banks inflate their premiums and search for the best deal for themselves. We prefer to serve our clients to the best of our ability. We usually win in the long run.

    We can compare the banks deal with what we can get, and usually win. Occaisionally the client is pressured by the bank on a nudge nudge wink wink basis. We help our clients , the banks help themselves.

    Lets keep it that way.

  10. To: Jack Morris

    “We help our clients, the banks help themselves. Let’s keep it that way.”

    Surely you don’t mean that Jack? What we need is for the banks to be brought into line with the same standards of customer care that we as IFA’s observe. If and when that finally happens (highly unlikely under the present corrupt regulatory regime, but you never know), the banks will throw in the towel and the market will be ours.

    Think back to when the banks tried to operate IFA arms ~ they just couldn’t hack it, which is why they all went tied. The only reason they’ve lasted this long even as tied agents is because the FSA has deliberately looked the other way and concentrated instead on kicking the crap out of the IFA sector.

    Our campaign must continue to be for a level regulatory playing field. If we can’t get that, then we need to get out to a different regulatory jurisdiction so that, as far as retail financial services is concerned, the FSA or CPMA won’t have any bodies other than the banks left to regulate. When they fail even to do that, they’ll become even greater pariahs than they already are. Maybe even a head or two will roll without the benefit of a massive golden parachute (all other peoples’ money of course), as happened with Clive Briault.

  11. One of the main points of the RDR is to create competition among advisers. I know that protections is currently out of scope but if, as the article suggests, Sesame Bankhall accepts loaded premiums then they are putting their advisers at a disadvantage against other advisers as the other end of the equation is a higher premium. SB advises could find themselves losing out to advisers in the same town giving the same level of advice but a cheaper premium than the SB adviser can offer. This looks very much like SB trying to replace income with higher commissions on protection. You used to have scruples about this Sesame – don’t throw them out!

  12. I have never heard so much nonsense.
    The poor client has never got the ‘best deal’ from the majority of sales from so called independant advisers. The Exchage system for judging cheapest premium has long since been able to be ‘fiddled’ to drop Co’s offering best premium. Those providers offing the largest commissions have always been favoured and the FSA turn a blind eye to ‘cropped lists’ on files. Its an easy sell – the IFA just justifies by saying its the ‘best service & underwriting’.

  13. On what hard evidence does Anonymous (22.8 @ 3.17 p.m.) base his assertion that advisers routinely edit out the most competitive premiums from their Exchange comparisons?

    Whenever I’m tendering for business, I always assume that I may well be up against a competitor who’s at least as good as I am in all and any departments (not least on the criteria of integrity), so I simply can’t afford to fiddle any premium comparisons.

  14. sesame are not going to force people into taking loading premiums. They are simply going to offer it as an option – and it will be upto individual companies to decide whether they would like to do it or not.

    I myself think that life insurance is a simple sell – and not on a level that a customer needs an IFA. Its not as complicated as pensions or investments – hence why the comparison websites win so much business as customers dont need advice so wont pay for it!

    Price is the overall winner with life policies – hike your prices and you’ll sell less and your clawback will go through the roof!

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