May 23, 2017
New research has revealed that many advisers will be charging more for their advice services as a result of the implementation of the Life Insurance Framework reforms.
This finding has emerged from early data released to Riskinfo by research firm, Investment Trends, as part of its 2017 Planner Risk Survey. One of the questions in this year’s survey, which is still collecting data, asks advisers about the extent to which they agree with a series of statements viewed in light of the Life Insurance Framework reforms.
52% of advisers said they agreed with the statement: “I will charge more for the advice I provide” (as a result of these reforms).
The suggestion here is that most, if not all, of advisers agreeing with this statement will re-shape their advice proposition to include a fee for advice component to compensate for the restriction in the upfront commission levels allowable once the LIF reforms take effect. At this point, it is unclear about the extent to which the client will actually pay more or whether any (presumed) premium reduction due to reduced commission levels will simply be balanced against a new or higher advice fee.
Of equal interest, however, is the implication that the remaining 48% of advisers did not agree with the statement that they would be charging more for their advice post the implementation of the LIF reforms.
Other early findings in this year’s Investment Trends Planner Risk Survey that relate to the introduction of the LIF reforms include:
- 47% agreed that “I will focus on strategic advice”
- 31% agreed that “The financial planning industry will be better off”
- 26% agreed with the statement that “Australians will be better off”
Riskinfo emphasises these are initial finding only, as the survey has yet to close. We will report other early results next week and will also deliver the Investment Trends analysis of these results in future articles.
We encourage any advisers who have yet to do so to participate in the Investment Trends 2017 Planner Risk Survey. Click here to take the survey (incentives offered).