Wednesday, 24 April 2013

Should an IFA refer individual PMI clients direct to medical insurers in return for an introducer fee ?

I've just put up a discussion point on my Linkedin group for professional introducers ( it's aimed to highlight the issue of IFA's who currently pass (or plan to) their clients - usually individuals I would guess - direct to one insurer for that companies direct sales team or franchisees to advise their client in return for some kind of introducer fee or year one commission split.

There is a good technical overview of how this works and some of the 'deals' available via insurers in issue 184 of Health Insurance Magazine (for March 2013).

As you might expect - given the fact that I am an independent, whole of market, healthcare specialist adviser who works closely with a panel of professional introducers - I think that doing this is a dreadful idea both for the IFA and their client. Here's why :

1) The IFA loses track of their client and is unlikely to be involved with future renewals
2) Often trail commission will be unavailable in future years
3) There is no opportunity to re-appraise the case in future years as this would be done by the insurer.
4) The client only receives advice on one companies products - the chances are that it is not 100% the best plan for them
5) Service is not usually given by the 'sales person' so on-going support for the client will often be non-existant with no central focus or contact point
6) The client disappears into the insurers bureaucracy and will never again be considered an individual in terms of their PMI plan - this is not how most independent advisers want to work with their clients (in my opinion)

I could go on, but my view is that if an IFA does not have the time or expertise to provide a full advisory service in the medical insurance arena then it makes far more sense to work with a professional like me who offers a full whole of market advice, on-going service and support both pre- and post-sale plus I specialise in working with introducers and offer a fair commission split for both new and renewal commission - in fact the deals offered by the insurers would tend to be no better and in many cases very much worse than those I offer to my professional introducers.

If you are interested in looking at this issue the best idea is to hop on Linkedin (use the above link to visit my introducer group) or e-mail me using the details below - I'm always happy to chat with and give advice to IFA's who are thinking about this issue through even if they don't ultimately end up working directly with my practice (although most I speak with do end up passing business to me in all modesty).

As an introducer (or prospective one) I think it would also be worth listening to ep 7 of the PMICast (my podcast focusing on private medical insurance) which covers off some other important information for my introducers. Details for finding PMICast are in the footer below.


If you're interested in a free review of your medical insurance cover (family or company paid) please get in touch :
Tel - 07792 075748 or 0113 3474395

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Phil Knight
Independent Healthcare Consultant

I'm a totally independent healthcare intermediary with 20 years market experience, not tied to any insurer, fully FCA regulated and part of the Premier Choice Healthcare Group. FCA Number 312878

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