- The New Zealand Government's (87%)
- The Australian Government's (8%)
- Neither (3%)
- Not sure (2%)
Australian advisers have demonstrated a clear preference for the approach taken by the New Zealand Government when it comes to addressing churning and commission-related issues.
For a poll that specifically asks advisers which approach would better serve the long-term interests of the consumer (rather than their own), 86% have indicated their support for the New Zealand approach to addressing churning and commissions, where the strategy mostly targets those advisers responsible for very high levels of replacement life insurance business, ie probable ‘churners’.
So far, only 10% of those voting in our poll prefer the more prescriptive approach taken by the Australian Government via its proposed Life Insurance Framework reforms. This approach places a much heavier emphasis on removing the incentive to churn or to deliver sub-standard advice, by halving upfront commissions and doubling the clawback period.
There is no client benefit from the Australian approach…
One adviser who appears to reflect the general mood of the meeting has commented that it is actually “…very easy for Australia to adopt the New Zealand approach which is the only one that will protect and benefit the client…” Emphasising the critical issue of what solutions will actually serve to benefit the consumer, the same adviser added: “There is no client benefit from the Australian approach.”
Our poll is simplistic because it asks you to choose between two approaches that have been articulated (ie ‘Restrict Commissions or Target Churners’). This doesn’t mean, however, that there are not solutions that include a combination of the two approaches. It doesn’t necessarily have to become a choice between one or the other.
This leads us to ask what your own preferred solution would be. Most have indicated support for the New Zealand model. But even before we have a conversation about the preferred solution, it would be of great value if we could determine the extent of churn and/or poor advice in Australia with a greater degree of certainty than currently exists.
Once again, it’s over to you to continue this conversation, as our poll remains open for another week…
The difference between the NZ and Australian approach, is NZ looked at the situation objectively and came up with easy solutions to an easy problem to fix.
Now compare that to the Australian approach which is to run several investigations over a number of years, getting innacurate data from every organisation, Government bodies, vested interest groups and left wing loonies with no idea of up or down, then make up some fanciful stories to attempt to justify the Millions of dollars wasted of Taxpayers money and for the Government to then make recommendations that are 100% wrong, maybe realise that their great leap forward, is a leap over a cliff, then find the whole thing too hard, call an election, forget what it was they were trying to achieve and then look at re-introducing the model that will destroy the retail Life Industry and wonder why there is another huon cry from Independent advisers who are the only ones that can truly represent all Australians, yet have been made the scapegoat for made up scenario’s sent via the FSC on behalf of the big end of town, whose sole purpose is to maximise profits at the expense of everyone else.
I will take a breathe now.
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