AMP will pay hybrid commissions on new life policies sold by its advisers from July 1, and it will limit advisers to a single one-year payment every five years.

Advisers will be paid an 80% commission for year one and a trail of 20% for subsequent years.

The hybrid commission will apply to tied and independent advisers selling AMP policies.

The limit of one upfront commission every five years will apply to all policies – regardless of the underwriter – written by AMP advisers.

This involves all policies written from July 1 2010. On policies that are rewritten due to changing client circumstances, advisers will be paid up to 40% of the one-year commission, to help with the cost of rewriting the policy.

AMP will apply the remuneration structure to all approved product lists, including other life insurers’ products.

CEO Craig Meller says the move comes as the life industry undertakes reforms to improve consumer confidence.

“This confidence is essential for AMP to achieve its most important objective – offer financial advice to help people improve their lives. These changes, which are initial steps towards a fee-for-service model, support this objective.”

Mr Meller says AMP has talked to adviser associations about the changes, and they have accepted the reforms are necessary.

“We will support advisers through the transition and are committed to developing technology and systems to allow advice to be delivered more efficiently.”