Sovereign has made headlines with its limited-time offer of 230% upfront commission when an adviser sells health and life insurance together.

The offer runs until the end of December.

Chief executive Symon Brewis-Weston said it was in response to competitors who had continued to raise the level of commissions over the past two years.

IFA chief executive Fred Dodds said: “If these 200% upfront commissions are still producing healthy profits for the life companies, will they ever come down?’

He said models that offered more renewal commission would be more appealing to those advisers who wanted to build a business rather than make money out of sales.

“An adviser who writes $100,000 AP per year with 120% upfront and 20% renewal, after five years they have $100,000 in renewal stream. It will never be like that because of cancellations but one thing is for sure, a healthy renewal stream will see an adviser look after his book more closely, might raise standards… add a bit of Unit Standard A, B, C and E and a further little bit of CPD and woops we add a bit of status to the sector.”

He said it could prompt some more discussion of the RFA designation. RFAs are not bound by the same code of conduct as AFAs, who must put clients’ interests first and disclose their remuneration.

But he said changes to the RFA designation and responsibilities were likely still two or three years away. “RFAs know that.”

Geoff Annals, of Accuro, said it was hard not to think that some insurers were trying to buy business.

He said it was bad for the industry. “I think the industry is getting stronger and stronger and there’s less of that. But it’s hard to conclude they’re not buying business when they pay 200%. Is that in the client’s best interests? As an insurer we’re interested in lifelong relationships.”