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The research produced by Melville Jessup Weaver last week showing high commission levels for life and income insurance advisers left me feeling cold.

I knew of course that advisers were paid commissions from insurance companies but 200 per cent of the first year's premium, plus other volume-related bonuses and soft-commissions like overseas holidays seemed ridiculous.

In my head I quickly calculated that if the average policy was $1500 and the commission was $3000 selling just one policy a week could easily add up to $150k a year.

Not bad work if you can get.

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But of course it's not as simple as that.

Independent advisers are running their own businesses which means they have overheads to take into account like any business and what they get in the hand will be vastly different once they have paid tax, rent, bills and other costs.

Commission itself is also another problem as it can vary wildly from year to year and I've never been keen to do any job that just paid commission.

But the biggest worry the report raised for me was how can I know any adviser isn't just selling me a policy that will pay him or her the biggest commission or earns them that free holiday.

Michael Naylor, a senior lecturer at Massey University and expert on the insurance industry says the problem is the public don't know at the moment.

While some advisers called authorised financial advisers have a code of conduct they must adhere to meaning whatever they recommend should be in their client's best interests most advisers who sell life and income protection insurance are registered financial advisers.

These advisers currently don't have to meet any minimum qualifications or put their client's best interests first.

While it would be nice if everyone who needed insurance could see an authorised adviser the reality is there are less than 2000 of these people in New Zealand.

But Naylor says the key to knowing if you have a good adviser is in the questions they ask about your personal situation including how long your family could survive if the key income earner lost their job or died.

If they spend their entire time in your company espousing the benefits of one particular policy or insurance company over another then maybe they're not the one for you.

Naylor compares it to visiting a doctor. He says most doctors wouldn't start off a consultation by convincing you to take a certain type of medicine because it was cheaper or better than the others.

They would ask what your symptoms were.

Naylor says a good adviser should be someone you are prepared to go back to every 12 months or whenever your circumstances change to tailor the insurance to your situation.

And he says they should be helping you to work on a plan to build up emergency savings to allow you to choose a greater stand-down period before needing the insurance to kick in - a move which can significantly reduce the costs of insurance.

Naylor says advisers have to be paid like anyone else who works.

But the current commission structure doesn't encourage most of the above situations.

Advisers have very high up-front commissions and very low annual commissions so there is little money in going back to clients to get them to update their policy.

Moves are afoot to change the insurance adviser landscape with the review of the Financial Adviser Act underway it's likely that all advisers will have to adhere to tougher standards in the future.

Until then it pays to be aware of what your needs are.