On March 14, Great-West Life and Canada Life announced the end of sales-volume based incentive conferences for advisors. Instead, they plan to transition towards open eligibility events that focus on advisor development for their independent distribution channels.
GWL is still considering its strategy for its London Life exclusive distribution channel.
This decision closely follows the report issued by the Canadian Life and Health Insurance Association (CLHIA) on insurance distribution in Canada. The report stated that travel incentives could contribute to a “perception of a conflict of interest”.
Nick Pszeniczny, executive vice-president, Individual Distribution and Marketing, Great-West Life, London Life and Canada Life, explained the decision in an announcement to advisors that was provided to the media. Noting that the industry, and the regulatory landscape, is rapidly evolving, he said that events in the financial markets over the last decade have caused insurers to re-examine business practices to ensure that consumers’ needs and priorities are paramount.
“We believe it is the right time to make this change. It’s the right move for our clients, for our advisors and the Canadian market place,” he said.
GWL's new approach mirrors the Canadian mutual fund industry’s current practices, notes the announcement.
Customer expectations growing
In the announcement, Pszeniczny and Phil Marsillo, senior vice-president, Individual Distribution, Canada Life, sympathized with the loss of these travel incentives. “We know some of you will find this decision to be disappointing and we understand that. However, with regulatory changes emerging and customer expectations growing, we want to position you for the highest level of success in your engagement with your clients. We ask for your support and sponsorship of this decision.”
Some members of the industry have publicly welcomed GWL’s decision. On advisor forum For Advisors Only, Conrad Toner, Certified Financial Planner and president of True North Retirement Counsel, commented, “Great-West Life is showing exceptional leadership by doing this and should be highly commended for it. Congratulations! This is long overdue in the insurance industry and one can only hope other insurance companies quickly follow GWL towards eliminating the huge conflicts of interest that come with such conferences. Ultimately the consumer will win, even if costs don’t immediately go down as a result. Kudos GWL!!”
On the same forum, Gordon Brock, an independent advisor, commented, “I would expect/anticipate the other Life Companies adopting the same position sooner rather than later. Simply an industry initiative designed to help keep one step ahead of the regulators. We as advisors might not like it – and some or many of us might argue we always put our client’s interests first in our planning/product recommendations and that we aren’t influenced by sales incentives such as Conferences or Contests – but whether we are or aren’t influenced by sales incentives is not the issue at this point – at this point it is the perception of influence with which must be dealt.”
