Advisers have expressed their strong disagreement with the Financial Services Council’s revised churning policy . While many have voiced the reasons they disagree with the FSC’s new proposal (see: Adviser Response to FSC’s New Life Insurance Framework), some have also offered alternative solutions.
We are asking advisers to register what they believe should be done to address the issue of churning. Some advisers have said they would be prepared to accept level commission only on replacement business, while most advisers appear to have accepted the FSC’s previous proposal to remove all takeover terms on replacement policies. Sections of the adviser community hold doubts that churning is even a significant issue, while others say the answer lies in creating a black list and banning those advisers who are referred to as serial churners.
While we have covered this question in a previous adviser poll, we want to offer this opportunity for you to reconsider your views in the wake of last week’s announcement by the FSC. Based on your previous comments, and also on the FSC’s original proposal, alternative solutions (you can select as many or as few as you wish) include:
- Black-list serial churners
- Ban upfront commissions on replacement policies
- Ban upfront/hybrid commissions on all business but allow level commissions
- Ban upfront commissions on all business but allow hybrid/level commissions
- Ban all risk commissions
- Remove takeover terms on replacement policies
- Introduce an industry wide two-year responsibility period
- Offer more attractive remuneration to advisers for upgrading existing policies
- Offer ‘quality’ incentives to advisers for maintaining low lapse ratios
- Nothing needs to be done
Tell us how you believe the issue of churning should be addressed…
