Would you buy savings and insurance products if you knew that for the first year as much as three quarters of your premium goes to commission? This is exactly what Independent Field Advertisers (IFAs) who sell products of Clientèle Life, a listed insurance company, are proposing.

Clientèle Life IFA programme is a multi-level marketing scheme that promises to set any South Africa older than 18 years up in business. Each IFA is encouraged to introduce a minimum of five people to buy life insurance and investment products with premiums of around R80 a month from Clientèle.

The IFA gets a slice of commission from the premiums paid by each of these five people. And if one or more of the five become IFAs themselves, introducing new Clientèle clients, the original IFA gets commission. This continues for six levels.

Here’s the commission structure for the first year of earnings.


% of premium















In other words, if you bought a Clientèle product from someone at level six for R100 a month, R75,75 would go towards satisfying the commission needs of those above you in the scheme for the first 12 months.

Once the first year of premiums is over, the commission drops to a maximum of 20% for the next two years.

This may sound like you paying too much commission. But Clientèle’s Paddy McDonald tells Moneyweb that clients who approach the insurer through its call centre pay exactly the same price.

Says McDonald: “The structure of commissions is no different to general market practice in that the costs of ‘acquisition’ are apportioned to the first three years of any life insurance policy.”

The client “acquisition” costs McDonald is referring to include expenses such as advertising, brokers’ commission and call centre costs, which can be mostly avoided through multi-level marketing schemes. 

He stresses that Clientèle complies with the Long-Term Insurance Act, which regulates commissions. “In fact if you bought a policy through a broker that represents any of the other life offices commission would represent as much as 85% of the first year’s premium,” argues McDonald.

McDonald goes on to point out that Clientèle is one of the few companies that pays commission “as and when” premiums are received. This contrasts its competition, where commission is applied up-front and would not be refunded in the case of a death or discontinuation within the first year.

McDonald says the multi-level marketing system is not dissimilar to the traditional “agency force” model adopted by life offices in that they apportion commission across a network of managers that could extend over four to six levels. He says last financial year Clientèle paid commissions in excess of R102m to its IFAs. In the same period, death claims payments were in excess of R24m.

The flagship product sold through Clientèle’s IFA programme is its Life Cash Back Plan, which is a whole life policy with cover of between R5 000 and R200 000.  Clientèle also offers a savings product.