Almost unknown a few months ago, the concept of “Clean share” has not yet established itself in life insurance, but it is starting to spread… The insurance giant Allianz is the last to have seized on it by offering it to the general public, for whom it seemed totally inaccessible, because until then reserved for wealth management.
What is the clean share, literally “own part” in French? To understand, you have to look at how insurers and their distributors make a living. They offer investment funds with impressive management fees as units of account. Costs that the management companies creating these funds repay – we speak, in the jargon, of “commission retrocessions” – to insurers, in charge for them to benefit their distributors.
The practice is not unfair, but can lead to questioning the interest that professionals have in offering one fund rather than another: one can always suspect that they are directing their clients to the most charged in fees to improve their ends of the month.
With the clean share, end of this practice: the funds chosen do not pay back any commission retrocession. Insurers and distributors can only count on the costs of the contracts to be remunerated, or on the invoicing of fees clearly announced from the start and payable by the customers, who accept them (or who may be reluctant to pay them…).
Falling addition
Fees which are much more transparent than commission retrocessions, since they appear clearly on the first page of all information notices or on initial contact documents that financial investment advisers must submit to their prospects before any signature or subscription.
Even if all management companies are interested in it, because the market is demanding, the funds clean share remain rare for the moment. Too bad, because there are savings in prospect, highlighted by the 2021 study on internal unit-linked costs of Good Value For Money, published last July.
“The saver who invests in actively managed units of account in a life insurance contract bears annual fees of around 2.10% to 3.10%, depending on the asset class” – calculation integrating both the management costs of the life insurance contract on units of account, and the ongoing costs charged by management companies within each unit of account -, indicates for example this study. While“With shares clean share, we are on annual amounts of total costs of the order of 1.50% to 2.10% “. Results : “The bill drops globally from 0.60% to 1.00% per year for the saver. “