What Will Happen to Risk Commissions?

1
What is the most likely outcome following ASIC's 2021 review of the impact of the Life Insurance Framework reforms?
  • The Labor Government will ban life insurance commissions (47%)
  • The Coalition Government will agree to retain life insurance commissions at the then level of 60/20 (23%)
  • The Labor Government will agree to retain life insurance commissions (17%)
  • The Coalition Government will mandate level commissions only (12%)

In the wake of the Banking Royal Commission, much industry debate is centering around the future of risk commissions. This poll is effectively asking you to make two judgements:

  1. Who will win the next Federal Election, widely assumed to be held in May 2019
  2. The decision you think the newly-elected Government will make regarding the future of life insurance commissions post ASIC’s 2021 review
A growing cohort of product manufacturers is declaring its support for the retention of life insurance commissions

A growing cohort of product manufacturers is declaring its support for the retention of life insurance commissions, particularly given the alternative models that collective wisdom says does not exist, which would still deliver much-needed quality life insurance solutions to the Australian consumer.

There appears to be a general consensus among industry stakeholders that banning risk commissions will spell and end to thousands of small advice businesses and deprive ‘mums and dads’ consumers, in particular, of the opportunity to access advice in their best interests that would secure at least their financial future if the worst should happen.

However, general consensus doesn’t always reflect governmental policy decisions and, to that extent, the future for risk commissions hangs in the balance.

This poll question is entirely at your disposal to debate, potentially taking into account other stories we’ve released in the last week, including:

ClearView Statement in Support of Commissions

TAL Joins Call to Retain Risk Commissions

Labor Reaffirms Position on Future of Risk Commissions

As always, we welcome your vote and your views on this critical debate, and we’ll report back to you next week…



1 COMMENT

  1. What we have been stating for years, is starting to occur.

    A quick recap.

    Life Companies could see an opportunity to reduce commissions and used their mouthpiece the FSC, to concoct a story based on half truths and a clear mandate to only tell the regulator what they wanted them to hear.

    ASIC, who has never understood the Life Insurance Industry, did a report that was full of holes, though which suited the Life Companies and the regulator in partnership with the FSC, came up with the disaster we are now in.

    The Life Companies, saw a great opportunity to rein in their costs at the advisers expense and did little to quell the discontent amongst advisers, who clearly could see and clearly articulated the future implications if this path continued.

    As usual, they were ignored.

    The Life Companies, behind the scenes, congratulated themselves on their victory and even though we warned them, once again they ignored us.

    Now, shock and horror, production is dropping and the light has finally come on.

    The Life Companies managers will now watch their jobs disappear, Investor returns plummet and the Retail Life Industry collapse unless these same Life Companies start to listen and start to do the right thing.

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