By Dan Eisner, Employee Benefits Advisor
As a reminder, the Canadian Life and Health Insurance Association (“CLHIA”) introduced its recommended compensation disclosure guidelines for employee benefits advisors in Canada back in January 2018 – commonly known as “G19”. That guideline required all advisors to disclose to employee benefits plan sponsors, for both group benefits and retirement plans, the compensation they receive. CLHIA ultimately withdrew their recommended G19 guidelines in May 2019 after facing significant opposition from multiple advisors and industry groups across Canada.
Many that opposed the G19 guidelines reassured us all that they were still in favour of transparency around compensation in the employee benefits industry and would work closely with regulators and other stakeholders going forward. So here we are almost 3 years since the G19 guidelines were introduced and the industry has still not developed any updated guidelines nor are we aware of any work that is being done on this concept.
All employee benefits plan sponsors deserve to know what they are paying and what services they are getting in return. Only then can they assess if they are getting full value from their employee benefits advisor. While most insurers in Canada can provide their own version of a “standard commission scale”, we believe that no two clients are necessarily the same and therefore advisor compensation schemes should not necessarily be “standard”. The employee benefits advisor should look to tailor the services provided to best suit their clients’ needs and the compensation arrangement should be based upon the scope of services provided.
At ZLC Financial we are proud to say that, while G19 may still be dead, transparency in compensation for ZLC employee benefits advisors continues to be alive and well. As noted in our Jun 4/19 update, we went in a different direction from the broader industry, as we did not agree with the work of the “anti-G19 advisors group”. We believe there should be full disclosure of the compensation paid, presented in the context of the advisory services provided, so that our clients can assess our “value add”. Starting Jan 1/19 we provide full disclosure, formally detailed in our annual employee benefits renewal report. The feedback from our clients continues to be great and we will continue so that each of our group benefits clients knows the nature of compensation paid to us and the estimated annual amount.
ZLC Financial is one of the fastest growing advisors for employee benefits programs in Vancouver and we are fortunate to have the best people, resources and clients. We provide value to you by leveraging one of the most skilled benefits teams – collectively over 350 years of experience within our team of 18 employee benefits specialists. We have been working with businesses ranging from 3 to over 75,000 plan members for over 35 years.
Disclaimer: This information is designed to educate and inform you of strategies and products currently available. The views (including any recommendations) expressed in this commentary are those of the author alone and are not necessarily those of ZLC Financial. This information is not to be construed as investment advice. It is for educational or information purposes only. It is not intended to provide legal, taxation or account advice; as each situation is different, please seek advice based on your specific circumstance. This commentary is not in any respect to be construed as an offer to sell or the solicitation of an offer to buy any securities.