Commissions should be retained for life insurance products, according to the latest riskinfo poll.
But opinion is divided as to whether commissions should also apply for investment and superannuation advice in future.
To date, our poll results show that 49% believe commissions should be retained in future for life insurance products only, while a further 45% of advisers say that commissions should be kept as a remuneration option for all product advice. This means 94% of respondents believe commissions should be retained for all products or at least for risk products.
Only 6% said commissions should be banned entirely.
One of the strands of opinion that ran through comments in support of retaining commissions across the board related to the nature of adviser remuneration being an issue that should be agreed between adviser and client:
“The only answer to this question is let the client decide by having full clear disclosure.”
“It should be up to the client who is after all paying for the service.”
Another opinion that was shared between a number of advisers is that commission levels should be standardised:
“… why not make the commission exactly the same regardless of the manufacturer, this will take the commission bias away from the adviser and lead product providers to compete on product quality and not against adviser renumeration.”
“… make the commissions the same across the board. That would remove the arguement that an Adviser is biased by one insurer over another.”
On the other hand, a comment in support of banning commissions entirely makes the point that under current arrangements it is the product manufacturer who decides how much the adviser should be paid:
“Would be simpler to get rid of commission and for advisors to charge for their advice – instead of allowing product manufacturers to determine how much advisors are paid.”
Addressing a query to riskinfo from a Queensland-based adviser, this poll contributes to the body of opinion about the future remuneration of advisers, and is not a vote about handing control of the nature of adviser remuneration to the client.
There appear to be specific messages stemming from our poll so far:
- Only a very small proportion of financial advisers believe commissions should banned entirely
- Allow the client and the adviser to jointly determine how the adviser should best be paid for the advice and services they provide to the client (either commission or fee for service)
- Standardise commission levels across all providers to remove any adviser bias to product manufacturers based on remuneration levels
Does this reflect your opinion? Is this the path down which we should be moving? Make your opinion known and make your vote count:
I agree with both points 1 and 2 – there is a strong arguement that clients with all the relevant info at their disposal should be able to agree with their adviser the terms for payment of fees. Secondly that to some degree if a commission structure stays in place that standardised rates of commission is paid to remove any bias based on this alone.
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