October 8, 2018
Should financial advisers be the only group permitted to continue to receive life insurance commissions in future?
- Yes (82%)
- No (14%)
- Not sure (4%)
Advisers have delivered a reasonably unequivocal verdict in our latest poll about who should be able to access risk commissions.
As we go to print, 82 percent of respondents agree that financial advisers should be the only group in future to continue to be remunerated by life insurance commissions. Of the remaining voters, 13 percent disagree and 5 percent are unsure.
Just to refresh your memory, the motivation for asking you this question stems from issues raised by the Banking Royal Commissioner, Kenneth Hayne, after the Insurance round of hearings last month, one of which revolved around whether “…monetary benefits given in relation to life risk insurance products remain exempt from the ban on conflicted remuneration…”
While the Commissioner’s focus in raising this issue was mostly around sales representatives within the direct insurance space, we’ve pointed out that Mr Hayne has also raised the issue of conflicted life insurance remuneration in his initial response to the Financial Advice hearings in April this year.
Where will this spotlight – this renewed focus on life insurance commissions, lead? We don’t know – but it would appear that Mr Hayne and Counsel Assisting the Commissioner have the issue of conflicted remuneration squarely in their sites.
One long-standing risk adviser has commented that while he believes there continues to be a role for direct insurance offers, he thinks remuneration for its sales representatives should be restricted:
Direct insurance has a place in my view, but only as an adjunct; not as frontline. Direct insurers should pay salaries with a bonus incentive. Worthwhile salespeople will rise to this opportunity to earn a greater income and provided they’re ethical, everyone benefits.
Does this accord with your view? Or do you think that even bonus incentives should be taken off the table when it comes to remunerating direct insurance sales staff?
…And where do you stand on the broader question of whether it should only be authorised representatives who can access risk commissions in future? Tell us what you think, as our poll remains open for one more week…