Opposition to the Financial Services Council’s (FSC) adviser remuneration guidelines is growing.

Last week, Zurich wrote to its advisers outlining its opposition to the changes, while Asteron says it plans an alternative solution to the problem of policy retention.

It is understood a number of other life companies, including AMP, are reviewing the guidelines and consulting with advisers.

An Asteron spokesman says the company supports the FSC’s decision to self-regulate and simplify the issue of replacement business.

“We also support sustainability for the industry, advisers and customers and are currently consulting with advisers on the proposed standard,” he added.

“Asteron Life has industry-leading retention data and analytics that are helping us to better understand the dynamics of retention and which clients are more predisposed to lapse.

“This gives us the opportunity to be proactive in influencing a better outcome for all parties.”

Clearview MD Simon Swanson says the company will lobby within the FSC on behalf of its advisers.

“We think the talks with the Association of Financial Advisers and the Financial Planning Association are important and should continue,” he told insuranceNEWS.com.au.

“We will also engage the FSC and see how the various talks develop.” 

At the FSC Life Insurance Conference in March, AIA Australia GM Life Insurance Damien Mu said churning is not a major problem for the industry.

“Our experience is that a small group of advisers are churning but we don’t think it is a large problem,” he said. “Advisers do move business where it is in the customer’s best interests and that should continue to happen.”

In its letter to advisers, Zurich Life calls for discussions between advisers, insurers and the FSC.

“Zurich notes that this is currently a proposal only, that specific details are not yet known and will now be the subject of a lengthy consultation process involving working parties and representatives from insurers, advisory groups and industry associations,” it says.

The consensus among life insurers is they know which advisers are churning and they are dealt with quietly, usually by putting them on flat commissions.

Zurich has proposed this approach, instead of a blanket ban on all advisers.

“Rather than penalise such legitimate replacements and impact all advisers, Zurich’s preferred approach is to deal individually with the very small number of advisers who ‘abuse the system’,” the company’s letter said.

The FSC adviser remuneration proposals are to be implemented from July 1 next year.