Yesterday the company announced sweeping changes to its commission structures which effectively kills off any insurance dealer group which bases its model on override commissions.

Instead the money will go to advisers and be paid to them based on good customer outcomes. 

Partners Life deserves plaudits for listening to the regulator and making changes to its business to address perceived issues around conflicts of interest.

The Financial Markets Authority is bound to be chipper that commission is being paid on customer outcomes.

How these will be measured and monitored is still a bit of a work in progress, but it's a step in the right direction.

A shake up to the dealer group market is a good thing. Many of the groups have been changing over the years and new models have evolved. We captured this in the most recent issue of ASSET Magazine (get your copy here).

However, the writing had been on the wall for business models that relied on override commissions. For some time now life insurers had complained the millions of dollars they paid to groups was not being spent as they wanted.

The last time something like this happened was way back when Tower still had a life insurance business. It's decision to get rid of overrides caused much gritting of teeth, especially at Kepa.

This latest decision is bound to have impact as Partners has such a strong position in new business sales.

Now Partners have decided to pay it to the financial advice providers (FAPs) actually giving the advice to customers which is the right thing to do. 

That way advisers can spend the money on their individual professional development and business needs. 

This is bound to lead to a change of thinking at Newpark which had been encouraging its members to establish their own FAPs. 

The advisers who have their own FAPs will be paid override commission rather than having to rely on dealer groups.

With these changes dealer groups will need to demonstrate they can provide services to members, which they are prepared to pay for.