Warning to insurance advisers selling up

A long-time life insurance adviser is warning fellow advisers with fire and general portfolios to check their contracts after finding he couldn't on-sell his client book.

Thursday, September 2nd 2021, 9:05PM

by Matthew Martin

Warren Duff.

Warren Duff, who has spent more than six decades in the life insurance business, says he's "bitterly disappointed" after learning his fire and general (F&G) clients were returned as direct customers to his three F&G providers.

But Duff says he understands his position and wants to use his experience to warn others thinking of retiring or moving out of the life insurance industry to check their F&G contracts.

"What has been the disaster is that my three fire and general insurers would not allow me to on-sell my portfolios of business. I had a very long association with them."

Duff says he held "substantial commissions" with his insurers and they "...got very good quality business from me and I feel the industry I worked with for decades has let me down somewhat".

"There will be a lot of commission agents writing life and doing some F&G and getting their commission so they need to be very wary of what's in their portfolio agreements.

"My life book has been taken over by a colleague, but there's no way I can sell my F&G book, and I worked hard for that.

"I have been unable to pass on any clients as they have claimed them for themselves and of course prevented any sale."

Duff says he and some of his colleagues found it hard to believe at first "...but on advancing the cause, I have been told not so" and that upon leaving the agreement, the insurer claims all the business registered under his name.

"I know it sounds like sour grapes, but check your agreement, take it to your lawyer," Duff says.

Financial services consultant and director of Chatswood Consulting Russell Hutchinson says it's not unusual for all types of insurers to stop advisers selling their books but has some sympathy for Duff's position.

"It's a good warning for others but this does happen in the life sphere as well as fire and general."

Hutchinson says clauses in adviser agreements can restrict the sale of a business for all sorts of reasons such as size and scale of an adviser's book, commission limits, renewal volume limits and that most insurers "reserve their right to transfer or to not approve a transaction".

Hutchinson says communication with insurers is the key.

Tags: Books for sale Commission communication Life insurance