It seems the days of sales-based travel incentive conferences in Hawaii, Paris, Lisbon, South America, Las Vegas, Monte Carlo or on cruises will soon sail into the sunset.
A growing list of market leaders have announced they will end their sales-based travel incentives and other insurers are currently looking at their own incentive programs.
Great-West Life/Canada Life was the first to announce the end of their program. Now, the growing list also includes: Manulife, RBC Insurance and Desjardins Insurance who have all confirmed an end to their programs in recent weeks.
Conflict of interest
The trend started after the Canadian Life and Health Insurance Association (CLHIA) released a report last month on Insurance Distribution which said sales based conferences could be perceived as a conflict of interest.
Leslie Byrnes, vice president of Distribution and Pensions at the CLHIA said while there weren’t any big problems, there was a perception in the public that it could be seen as a conflict of interest and it was time for the industry to work on the perception.
“Our recommendation is manufacturers that distribute through independent channels should be restricted from offering conferences in which they pay for advisors to attend. The advisor should pay their own expenses, and this would remove the perception of a conflict of interest,” she said. (For more on the CLHIA’s recommendations, see: CLHIA says sales practices could be improved).
Byrnes said the feedback to the CLHIA has been positive with advisors wanting to do the right thing.
“We are not hearing any push back on this, I think people accept there could be a perception. They’re doing the right thing by the customer… placing them in the right policy. If there is a perception that there may be a conflict of interest, they (advisors) don’t want to be tainted by this,” she explained.
Managing general agencies contacted by The Insurance and Investment Journal say they understand the move to cut travel incentive conferences.
Kevin Cott, CEO of Qualifed Financial Services (QFS) agreed there could be a conflict of interest on the basis that insurance is being sold to qualify for a travel conference.
Although he said he thinks the issue of conflict of interest was more a perception issue than a reality, Jim Virtue, president and CEO of PPI Solutions anticipates that sales-based travel incentives are on their way out altogether. “In the current form, that ship has sailed. I do believe that all the carriers will follow Great-West Life and get out of these sales-based conferences.”
Virtue commended Great-West Life/Canada Life for being the first to step up and end these incentives.
For Karl Krokosinski CEO of Customplan Financial said he also believes they won’t be around too much longer. “I suspect they’ll be going local. I suspect they’ll be bringing in a better calibre of speakers and I suspect insurance companies will allow everyone to go,” he said.
Though they appear to be on their way out, the MGAs interviewed underlined that conferences did have value. Whether in Phoenix, Arizona or along the French Riviera, they offered a chance for top advisors to mix and network with people from Vancouver to St. John’s.
“From a networking point of view it provides an excellent chance to meet all the senior people from the insurance companies as they’re all in one place,” said Virtue.
“The big benefit from networking is that if I have an issue with the company, I know who to call as we already know each other. You’re much more likely to work with someone whom you’ve met face to face and know.”
In addition to networking, such travel conferences are an opportunity for companies to showcase new products, or provide resources to advisors to improve their sales.
Krokosinski said these conferences were about more than just products. They were very educational because they included speakers on a range of topics.
“They bring in speakers on marketing, configuring portfolios, how to ask questions and how to invest. They’re bringing in a better calibre of teaching,” he said.
Could the decision by these companies to end their conferences put them at a competitive disadvantage, while others continue to hold conferences?
Cott said there might be a short term disadvantage before it becomes a level playing field since some advisors may prefer to sell another product that still has an opportunity for rewards.
Virtue doesn’t see advisors switching their business to go to one last conference.
“There’s still an old guard who just sell based on conferences or bonuses... But those are a dying breed,” said Krokosinski.
While Canada Life and RBC Insurance will end their sales-based conferences this year; Great-West Life will join them in 2017 and Manulife and Desjardins will both end their sales-volume based travel conferences at the end of their current eligibility periods in 2018, some believe they didn’t have to wait until then.
“I believe they could end them now, I don’t think it would cause a huge uproar. A lot of advisors are dual-licensed and a lot of them don’t care much about these conferences,” said Krokosinski.
Most companies who have ended travel incentives seem to be moving to open-eligibility conferences where any advisor can attend.
This would mean any advisor, whether at the top or bottom, who pays can attend, network and listen to speakers. Most companies say their replacement conferences will have a greater educational component to them.
RBC Insurance confirmed their new program would deliver quality educational events for independent advisors, which would focus on the industry, clients and practice management.
It seems there is support from all sides of the spectrum on a move to more open and educational conferences.
“It’s good a move…It’s a lot more transparent because (currently) most of the advisors don’t tell their clients (about travel incentives)and under the rules you’re supposed to,” said Krokosinski.
Leslie Brynes said the CLHIA hoped the steps to end travel-based conference incentives would help the industry improve on becoming more customer focused.
Some insurers’ current positions on sales-based incentives
WILL END: Canada Life will hold their last conference in 2016 and Great-West Life will end hold their last in 2017 and both will transition to open eligibility conferences. No decision has been made for London Life.
WILL END: Will hold their last conference in 2018 at the end of the current eligibility period. Currently are reviewing a number of issues including advisor rewards and recognition.
WILL END: They will hold their last conference for independent advisors in 2018. From 2019, new initiatives will replace existing conferences.
UNDECIDED: Supports the CLHIA’s recommendation that advisors pay to attend conferences. Had not made a decision about the future of their own conferences yet.
Declined to speak to The Insurance and Investment Journal about this topic and provided no news on the future of their conferences.
No word on whether they will end or continue their conferences.
WILL END: Confirmed they will hold their last conference next month in Maui. For next year, they plan to move to quality educational events for select independent advisors focused on the industry, clients and practice management.