Ban Upfront Commissions – FSI

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The Financial System Inquiry has recommended the effective banning of upfront life insurance commissions.

In its final report, released today, the David Murray-led Financial System Inquiry has made 44 recommendations to the Government based on its investigation into Australia’s financial services sector.

Recommendation 24 in the final report relates to aligning the interests of financial firms and consumers. Within this recommendation is the call by the Inquiry to effectively ban upfront risk commissions in its recommendation to require that ‘… upfront commission for life insurance advice is not greater than ongoing commissions.’ The report’s rationale for this recommendation is based on the Inquiry’s concern with findings handed down in the recent ASIC Review of Retail Life Insurance Advice. The FSI report states:

“A recent ASIC report on life insurance revealed significant problems with both compliance and the consequences for consumers. More than a third of the personal advice reviewed failed to comply with the laws relating to appropriate advice and prioritising the needs of the consumer.”

… industry approaches to address the issues in life insurance have not worked

The report continues:

“Upfront commissions can affect the quality of advice. ASIC found that 96 per cent of advice rated as a ‘fail’ was given by advisers paid under an upfront commission model. ASIC also found high upfront commissions encourage advisers to replace a consumer’s policy rather than retain it. In some cases, this may result in inferior policy terms. To date, industry approaches to address the issues in life insurance have not worked.”

The FSI says that by ensuring upfront commission for life insurance advice is not greater than ongoing commissions would mean reducing incentives for churning and improve the quality of advice on life insurance. The report goes on to explain how the FSI envisages a level commission remuneration environment would operate:

The remuneration model needs to be sustainable; otherwise there is a risk that providers may exit the market…

“For life insurance, the Inquiry recommends a level commission structure implemented through legislation requiring that an upfront commission is not greater than the ongoing commission. This would provide a balanced and cost effective approach to better align the interests of advisers and consumers. The remuneration model needs to be sustainable; otherwise there is a risk that providers may exit the market, making it more difficult for consumers to obtain life insurance advice.”

The report acknowledges that the findings of the yet-to-be-released Financial Services Council and the Association of Financial Advisers working group should also be considered during the development and implementation phases of the recommendations.

Riskinfo will provide additional reporting on the final report from the Financial System Inquiry, including reaction to all the key Recommendations, including Recommendation 24.

Click here to download the final report from the Financial System Inquiry.

 



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54 COMMENTS

  1. Do they have any idea what it costs to run an advice business?? I have 8 staff who I am sure would just love to be paid on a drip feed system Most advisors require a cash flow to survive Upfront commissions are not the issue in so called bad risk advice Products constantly change better benefits are added but almost always with a considerable increase in pricing Onepath comminsure and AIA have all
    Just recently increased their premiums not everyone can afford them! Comminsure now has a policy in place that Commission “full stop” is not payable on any product being placed with them if the client had a like for like policy in force over the last 5 years regardless of how long they held the policy previously!!! Is not that a way of preserving business and not paying again on a re printed case
    To eliminate upfront commissions will kill the risk profession and the only winners will be the Banks and insurers who once again do as they please regardless of the consequences to the advisor industry
    Insurers who are almost all bank owned are helpless to do the right thing by their advisor force Its all about the bottom line how many Billions can we record this six month period

    • Its True some advisers are totally out of the proportion when it comes to commissions.
      But that does not mean they will punish the ones who do their job properly.

      It is like saying some people exploit centrelink with false info so stop social security payments as people are ripping government off. Its just absurd

      By increasing compliance they have already restricted the market and increased advice cost by doing this they would further increase costs which in turn would restrict financial advice to rich

      Those who give wrong advice will continue to do so. The only way is to do quality reviews to control.
      Banning upfront commissions would rather instigate a drive for grabbing more business to maintain turnover which would deter quality of advice

      Further impact on of lower middle class families who desperately need planning but wont be doing that fearing upfront costs

      In the longer term The Economy would experience Multi-fold increase in Social security payments and thus budget deficits if the govt pertains to these activities

      Its already a compliance overkill and industry is now moving towards less revenues Good Job FSI

      Hope you could have noticed that the reason for upfront commissions being in the report is because most cases are put as upfront commissions for business to meet viability.
      It is rather the people who sell stepped covers over phone without physically meeting as if everyone is an expert where the client would save hundred thousands in premium with proper planning of a hybrid or a purely leveled cover. Eventually forget about the terms the client either ends up with no insurance or no super situation .

      Just frustrating how the govt tends to blame third party individual planners and not the banks who screw up the most

  2. Upfront commissions were originally designed to help fund the advisers business model.
    If you revert to level commissions advisers will need to charge fees as well as initial level commission to even cover their time and advice.
    The consumer therefore will be no better off, perhaps worse off.
    Further this measure will not stop so called churning of business. Currently the market dictates that.

  3. Do these people have any idea. Advisers will now need to charge fees and how on earth will the small person, who is a greater needed of advice be able to afford it. One wonders what planet these people live on. Do these people get paid on drip feed. I think not.

  4. Upfront commission was originally designed to help fund the advisers business, If they revert to level commission it will be necessary to charge fees as well to cover their time and advice.
    Therefore the consumer will be no better off, perhaps worse off.
    Further it will not stop so called churning of policies, which in the main is dictated by the market.
    Note the recent substantial increases of premiums by some life offices. Therefore do we leave our client in a non competitive product?

  5. Why don’t FSI, name and shame the Life companies that are happy to accept business that accepts churned business.

    Why doesn’t the FSI name and shame the advisers and the Licensees they work under that they see replacing policies that are rewritten based solely on receiving upfront commissions.

    ASIC has outlined that every recommendation to replace a Risk policy or investment recommendation MUST enunciate advantages and disadvantages, comparative costs, benefits lost or gained…. and other considerations.

    If these things are not explained to a client in a SOA so they understand the benefits/ramifications/consequences of changes, then prosecute the case against those few who don’t,… not the whole industry.
    Bureaucrats know only one thing, …. rather than solve the problem easily,…. lets torch the whole house to get rid of a few rats.

  6. Advisers who get paid a salary by a bank or major financial institution are more likely to offer advice in the best interests of their employer than their client.
    Risk Advisers who are remunerated by commissions work for the client, not the insurer, so their own interest is better aligned with the clients.
    Removing upfront commissions will reduce the availability of advisers who are not aligned with major financial institutions.
    Who wins from that, consumers, advisers, or major financial institutions?

  7. Turning to Hybrid Comm I wholeheartedly accept – this allows income for advice given, sometimes some profit, and balances out when some cases are declined / deferred. Allows paid time for reviewing clients year upon year, ultimately providing an ongoing service.

    Further the spread of income allows us to be involved when they need us most, whilst on claim, during which time ie on IP there is no adviser income! A trauma or death payment, again cancelling out income in future on those policies, once served their purpose.

    Level comm in all cases is going too far when so much time is involved in first year.

    Mums & Dads and Small business will be the losers here. As who is going to spend min 6 hours including travel time to earn a few hundred dollars, which dose not even cover cost of service, and they’re least able to afford advice.

    Pushing these consumers to online services means they will not have suitable coverage in place.

    Again a few poor advisers set the agenda for those who want to provide good service to their clients, not in advice or even implementation, but claims service when they need us most.

    As 1st Jan comes about, the year will cost $15-50k just to have doors open for advice.

    Those who make these judgements really ought to consider the broader impact on consumers, as the exit of experience in the risk industry is not going to be replaced. The losers here would be the consumers.

    And the winners…..the product providers, who cry fowl of sustainability whilst paying middle and upper management packages determined by the advisers effectiveness in selling the need message.

    Hybrid is the answer here, not Level across the board. Think this through from all perspectives.

  8. no doubt insurance companies will use this and join together to implement hybrid across the board. get used to hyrbid and level commissions form middle of 2015 as thats where it is heading.

      • Agree with David, clearly the recommendation is that first year commission cannot exceed ongoing. I have written hybrid commission since Lumley Life days [circa 1992 – 80/20 and in most cases still 80/20 today]. Hybrid allows sufficient initial income to offset most adviser costs. Hybrid ongoing commission has also allowed me to build a business model over the past 22 years that ensures I get out of bed on 1 January each year with ALL my business costs covered for the next 12 month. Any new business commission is treated by me now as pure “profit”. So technically a “level” commission structure would have no negative impact on my current business structure, more likely it would enhance it over time. But the elephants in the room are two-fold – one being the life offices endlessly pushing upfront commissions since Adam was a boy. The second, how does a new, young risk insurance adviser enter the industry with only “level” commissions as an option? Fine if they have $10k premium clients – but in the real world many “Mum & Dad” clients still need professional advice even where the appropriate premium cost may only be $100 per month. I can cover my costs in this case with my 22 years of accumulated ongoing income, but not a young, new adviser. Hey I know, why not charge fees on a client paying $1200 a year – with commission. So, netting out the commission to arrive at a $950 premium, then adding $750 to cover the young adviser’s time, let alone the $1650 I would need [based on my hourly business cost], how in the world does this possible benefit the most important component in this whole saga – the consumer? It doesn’t of course. But for as long as we have bureaucrats and politicians [dare I example a certain Tassie Senator?] pushing their own agendas or simply keeping themselves in a job, we will NEVER have a fair deal for consumers and advisers alike. But the banks and life companies – no worries, they’ll continue to “cheapen the brand” and do whatever it takes to keep the dollars coming in – with or without advisers – with or without commissions. With or without the client’s best interests taken into account!

  9. Mr Murray, some advisers could not cope going from 130% upfront to 30% level. I am not sure what risk business could really?? I like the stepped, hybrid and level approach personally. Rather than kill the risk adviser today maybe wind back to stepped (max of 90%) in 2016. Run that for 5 years and review then? If you belong to the AFA, FPA or any adviser association we need to push hard and fast to the power brokers that this not commercially real. Some of the FSI recs put out today are sound in theory but, unworkable in a small risk adviser’s practice.

  10. Reasonable basis is where the issue is and banning upfront commission won’t change a thing. If a rogue adviser can’t meet the reasonable basis test, then obviously reparations are needed around this.

    Going hybrid or level commission improves the value of an adviser’s business, so at least that ‘s some silver lining.

    Alternatively, forget about personal insurances altogether and drain Australia’s economy to fund Centrelink recipients even further.

    • I agree reasonable basis for a recommendation should have been the issue since the 2000 financial reforms but bank employees have got away with recommending their employers product without a reasonable basis for 14 years.
      Why?
      “96 per cent of advice rated as a ‘fail’ was given by advisers paid under an upfront commission model.”
      They probably all wore suits also does that substantiate a causal link between suits and bad advice?
      Commission for advice on investments was broken and they fixed it.
      Commission on risk is not broken but they insist on fixing it and not the elephant in the room enforcing reasonable basis for a recommendation.

  11. What a complete load of rubbish. We do 40-50 new life, trauma and IP sales per month with 89% of these sales to first home buyers and consumers that dont already have any cover. If we do provide advice to consumers that have existing cover these needs are firstly taken into account. Our clients couldn’t afford and wouldnt value the product high enough to pay a fee and I cannot see a model sustainable enough that does not include a decent upfront commission. With wage and overhead costs as they are, our advisers driving 1000’s of kms per month to see a client 2 or 3 times to make one sale – the remuneration needs to be of such to support this type of role. So long as clients existing policies are taken into account and we do not recommend new policies just to simply earn a commission and clients needs are taken first and foremost I do not see an issue. Can i ask if the people making these recommendations have ever been out to see a client on a wet windy Sunday night at 7pm or ever owned an advice business??? Clearly not.

  12. Hi guys,
    I am currently a Bank Planner who is in the process of setting up a Risk Brokering business.

    This change would make is almost impossible to setup a new risk business.

    – Making it harder to cover dealership fees
    – how would you incentify a referral partner when only getting 30% upfront
    – how do you cover costs of travel, everyday running

    The only winners here are the banks who are planning a massive push into the direct channel cutting out the advisers. I see it everyday, they call it “risk minimisation”

    The losers are always advisers and consumers. E.g FOFA, advisers lost their trail, yet the banks are pocket ongoing adviser service fees.

  13. Thats it, I am sacking all the staff and getting a job. i can’t stand all these changes. Have they any idea how much it costs to run a business. My wife wants a divorced to secure her financial future, I am seeing a phycologist because I can’t stand the stress. The bank looks like it want to call in the loans, the landlord wants to know how much rent he is going to charge next year, the afsl license is just not worth the money. I could go on but its just not worth it. What was the life insurance clause for suicide again. I am just kidding but there would be more than a few advisers looking at this as a way to solve there problems

    • To “Thatsit”…don’t even consider it! I’m with you 100% with your frustration and we’re definitely getting railroaded by people with impure motives themselves but “that” is not an option…just know you’re now alone and I hear you. This is a bloody disgrace though. Keep an eye out for my opinion on this…there my great weekend gone too!

    • Thatsit,

      Read your statement I thought you were a Public Accountant. Your statement relates to me and most of my colleagues, than I realised you are a risk writer. You have nothing to complain about.

    • Sadly thats it. The top end of towns greed is just getting a kickup. We lost an adviser I knew last year to Suicide. New independent advisers will go under and new ones will not replace the market. Another successful destruction of the small independent Risk Adviser. I await for the FSC to stick the knife in further!!!!
      See you at the bank!

      • Chin up Mate, Your not alone. Everyone got screwed. Think positive! Least you got some good times in. Imagine if you were a start up business with no capital. If you can survive there wont be much non-bank competition.

  14. The opportunity was there to work towards a solution when the FSC put forward 3-yr clawback period. Yes, the clawback rates were a bit high, but rather than negotiate a solution, the proposal was declined outright.

  15. Well done David Murray – you have effectively handed the life insurance industry to the institutions and industry based purveyors of insurance. Each of whom has proven to be more corrupted and incompetent than the majority of independent advisers.

    As a matter of interest, did you and your fellow bureaucrats opt for an upfront payment for your consultancy work, or would you accept that which you have recommended for us – payment on a drip feed basis over a period yet to be determined?

  16. Many good comments above. Ironic that our business which is there to protect and grow wealth for our clients is in serious danger of not being able to do so for us going forward. I’m all for protecting consumers from ‘bad advice’ but this destruction of the remuneration models which have enabled advisers to build sustainable businesses based on the existing models which have existed forever… Is simply going way too far. Way to ruin an otherwise enjoyable Sunday!

  17. Let’s hope the moderation checks facts as reported and not political correctness, all of these figures were reported in the popular press and therefore are in the public domain.

  18. For almost 10 years my preferred option has been hyrbid, which I believe was the best decision I have ever made. It’s a compromise; level is too much of a business risk for the adviser and upfront it would appear too big a risk for the insurer.

  19. Had to go watch Melbourne City win to calm down. They are asking say 6,000 dedicated risk insurance writers out of 18,000 financial planners to take a 50% to 75% haircut to our revenue pa at least. I am not sure who this is helping. If the Federal Liberals let this come in they will end up like Vic Liberals unemployed. Watch this space join the AFA to fight this attack on small business.

  21. This is wrong on so many levels!!!

    Firstly, ASIC’s report is so biased and misleading, it ought to be discredited and dismissed altogether. How can anyone or any regulator (with any integrity) go to a life insurance company and ask for a report on the biggest writers and the biggest churners, audit those advisers and have the audacity to use that as their foundation for these latest industry recommendations. It’s no different in my mind to walking into a jail and saying to the warden, show me all the criminals. That report is flawed and does not reflect the integrity or the professionalism of the advisers I’m proud to call my industry colleagues.

    Secondly, David Murray. How dare he pass comment or judgement on advisers right to earn an honest living by way of Upfront Commission, where appropriate. This comes from a man who earnt MILLIONS in bonuses and perks each year from running a bank that imposed and enforced limitless fees and charges on average Australians busting their humps every day just so they could make ends meet. To sit back now, in his bell tower, after being paid all those millions, and say we can’t earn an honest living makes me angrier than just about anything I’ve ever encountered.

    There is and always will be a place for Upfront Commissions and to say there isn’t, right across the board, is just ludicrous and uninformed. Australia’s life insurance industry and underinsurance problem will only suffer if upfront commissions are banned altogether. Those who disagree simply don’t understand the industry and should keep their uninformed, biased opinions to themselves and let me and my professionally minded, honest industry colleagues do what we do best – understand our clients needs, research and recommend the right solution and then help our clients implement those risk insurance solutions. Any adviser who’s seen a client come and go through no fault of their own or worked through a claims process, knows this process works for the majority. The minority doing the wrong thing need to be eradicated from the industry altogether like the noxious weeds they are.

  22. Having been advising clients since 1984. I and many from my era have had to adapt and thrive with change. This is an opportunity to fully move to $Flat Fee for service. I have done it and clients like it. Level brokerage on life insurance sits well with my clients and my business. Look to other services you can offer clients other than Super and Insurance to future proof your business.

    Come on guys you can do this and reinvent youselves and continue providing great service to your clients. Turn what looks to be a negative change to a positive opportunity to build a great profession.

    • Like you, I prefer level commissions. I would not presume to tell others how they should run their business let alone mandate it in legislation.

    • Pete…. that’s great for those who have been in the business like yourself for umpteen years. For new advisers to enter it is a major impost, they don’t have a big book behind them to support the associated costs…… So, your practice has just had a hair cut because there will be less people wanting to move into the space. Think about it!

  24. There is more than enough compliance to prevent malpractice.

    iI certainly do my utmost to ensure that my clients risk insurance needs are comprehensively taken care of and I am sure that most risk advisers do likewise.

    Perhaps there are too many bureaucrats feeding off the system.

  25. The change in commissions has been in the wind for awhile and just quietly, I believe it is being lead by the insurers so as to rid themselves of small advisers and only deal with “the big boys” (practises).

    So, how about a compromise and spread the financial impact between the smaller advisers and the bigger practises.

    For example, Commissions payable:

    up to $ 5,000.00 – Upfront, Hybred and Level.

    $5,001.00 > $10,000.00 – Hybred and Level.

    Above $10,001.00 – Level.

    This gives everyone a chance to look after the “mums and dads” as they are the ones who will suffer the most under this new insurer driven recommendation and don’t even think about charging a fee, as they will turn to the internet or phone.

    Obviously, I am a small adviser, but we have a place in this picture. We look after the Mums and Dads, blue collar apprentices, small business owners ect while the practises tend to look after the professionals. See, we all fit into this wonderful industry.

    The above paragraph is aimed at any insurer who has the guts to read this site.

  26. Oh, almost forgot……..

    The calculation will also assist the smaller adviser to grow and bring new advisers into play.

    Come on, we all have to fight for a good outcome. This is not a fight to be left to the smaller advisers.

    Don’t you big boys rest on your laurels and think that you are immune to an financial problems in the future. After all, who is going to afford to buy your big expensive practise in the future, if there are no new advisers or up and coming smaller practises?

  27. The insurance companies are going broke over up-front commissions, increasing lapses and claims. An up-front policy only makes a business profit after 6 years, and the average policy tenure is less than this. What other solutions are there? Stepped and Hybrid will not discourage churning and are a band aid fix to our industries problems.

    Level premiums will be tough early, but reap the rewards with proper client management, retention and good advice. Ensure the policies are in force for long periods of time and the adviser can earn more over the life of the policy, and their business is worth 3x.

  28. What a joy to have this outrageously splashed in the front of my eyes. There is no direct correlation between upfront commissions and immorality. There is a real risk here of another piece of policy costing thousands and wait for it: not making any sense. IF (and that my friend is a big if) the issue is taking upfront commissions on an inferior policy for the client, then exclusively look at that to mitigate that risk and leave everyone else out of it. Any change to engulf all new clients entering personal insurance arrangements would be a poor concept. IF replacement policies were an issue, cap the number of times you can collect upfront commission for the one client in a lifetime per dealership. That will sort out most of the issues that they’re talking about. Leave this industry alone, there is enough going on which makes it complicated, frustrating and lacking sensibility. The majority of financial planners are professional and take these allegations extremely seriously, I’ve just about had a gutful of politicians, journalists and bodies who suggest otherwise.

  29. This will result in advisers being incentivised to not replace products when it is appropriate.

    As a result, insurers will close product series and increase premiums confident that advisers will not replace them because they are not compensated to do so.

  30. I don’t mind level commissions, it’s fair and your advice can’t be seen as biased or influenced. As a new AFSL we decided to have all risk commissions level from the start and over time it has worked well for us and the client. This may steady down the forced sale of risk and at times over selling to get higher commissions (I see this quite readily with bank advice).

  31. In a world where we are supposed to professional financial planners charging clients based on the amount of work involved, how can this enquiry possibly think that there is as much work involved each year to review a client, as there is to set it all up properly to start with.

    Having higher up front commission pays for the additional time and effort invloved to give good advice and get the client properly insured. The ongoing only has to cover, in most cases, a short review to make adjustments if they are needed or help with claims. In more cases than not, if it is done properly to start with there will be no changes needed.

    Why should I be paid the same for a 1 or 2 hour review as I am for 1 to 2 days work to do a detailed fact find, thoroughly research products and defintions and get it right the first time.

    I know the current system is not ideal, but can we have someone appointed to conduct these reviews that has half an idea how the advice process works. By all means put a cap on up front commission, but it should always be more than the ongoing income.

  33. Well the elephant is in the room again.
    This has nothing to do with churning and everything to do with power.
    We now have another enquiry based on a biased survey by people who have nothing to lose – only gain! Of Course us advisers are going to get shafted.
    The members of the FSI would have to be the worst representatives to carry our industry forward.
    All have their own agendas to push and no idea of the real world, the consumer is so far from their mind its scary!

    Most life companies prefer upfront over hybrid – in the long term (I know its hard for anyone in Govt to think longer than their term) the life companies profitability is going to be reduced with paying out higher comms on an ongoing basis.

    About time we had a proper investigation into the powers that are trying to destroy our industry – the powerbrokers keep naming us all as unethical and immoral – look in your own backyard. Its time we had our own enquiry into those that are trying to bring us down.

  34. We appear to be the only country in the world whereby a democratically elected government can dictate, legislate, regulate the amount and way that we in our industry are being paid or remunerated, whether it be by way of commissions or fees.
    I have been an adviser for over 40 years and in the last two years in the financial services industry, (a profession that I am proud to be involved in) it appears as though the government, regardless of the political party have wanted to dictate and complicate the services and the way we are remunerated to our industry. Our focus has always been on providing the best possible service to our clients and yet government regulation wants to dictate the way we do things and the manner in which we are remunerated. We all know that in recent times the amendments to FOFA were blocked by a Senator who probably has no idea what implications her decision is made to the industry let alone the millions of dollars of costs involved.
    Maybe as an industry we should lobby for changes to be made to the structure of the government in Australia so that the vital decision-making of the country does not rest in the hands of one or two independent people whose only desire is to hold the government to ransom so that they can get what they want.
    We are a democratically governed country and it would be interesting to determine whether the government has the right constitutionally to dictate terms and conditions to any industry let alone the financial services Industry.
    First superannuation and now risk – WHAT NEXT.
    Hopefully sense will prevail and the current government will see that interference into our industry will only be detrimental to the services provided to Australians. Small business cannot continue to afford to run their financial services business, including employing many people if the government keeps interfering, changing and dictating the way we are to operate.
    I realise that (like all industries) there are bad apples but why penalise the majority who are trying to do the right thing.

  35. Is this the last straw!

    If they want to ie Financial Services Inquiry to destroy our Industry, that is exactly what will happen if they go ahead and implement the banning of the current up front commissions which cover a multitude of running costs .An ongoing commission of say 30% would be unsustainable for most Life Insurance brokers and advisory businesses. A new adviser would have little incentive or hope.
    In the UK they banned commissions and the Industry collapsed and as a result commissions were speedily re introduced. Even the Labor party here recognized it was a big mistake by their socialist counterparts in the UK.
    The structure of how we get paid and how much and the costs of replacement of policies should be left to the Life companies who are quite capable of sorting out and negotiating these issues. Lapse rates have always been around 10% so its nothing new.

    Unfortunately the main core of the FOFA reforms remain the same after the Senate rejected them for the time being. These regressive and coercive reforms are going to be onerous and very costly in time and money for advisers and consumers to be compliant.

    If I can appeal to all advisers before the end of Jan 2015 to write to their federal member of parliament to try and prevent a level ongoing commission structure being recommended by the FSI to be considered for legislation over the next 3 to 6 months.

  37. “an upfront commission is not greater than the ongoing commission” ?????
    Ok……I would be very happy with say 69% upfront and 70% ongoing every year.
    Would that be ok with you David ?
    That would satisfy your recommendations that the upfront commission should not exceed the ongoing and would stop your so-called “churning” in it’s tracks.
    Any recommendation for change or alteration in insurance would be driven by the clients best interest and have nothing to do with re-generation of business for the benefit of commission.
    Or we could just leave things exactly as they are and refrain from anything to do with the Life Insurance business for the next decade and put the onus on the insurers to develop competent systems and processes by which they only pay level commissions to repeat offenders or decide to not accept their business at all.
    It’s not that hard to decide from which sources you are prepared to accept business from to ensure a profitable model. The problem is that some insurers will still accept large volumes of business from advisers who have taken it from a competitor only 2-3 years prior.
    This years hero….next years thief.

  38. Since when does the govt. care about private companies profitability?

    Cant blame just the churners – Many of the life companies are guilty of mass takeover terms themselves! (Complete books have been taken over from one Life Co. to another at the arrangement of the life Co.)

    The consumer has been forgotten once again in all this!

  39. Dear colleagues, 50 years as a Financial planner I have seen it all, At least I thought so, I have two degrees as an actuary (Yes in know ).

    I have a masters degree in economics and applied fiancé, 12,000.00 clients, a burning desire for more challenges An ex wife and now this.

    This is one challenge that sets the cats amongst the pigeons, this idea is not constitutional, it is not Australian and defiantly, only in the interests of company profits.

    The entire Campbell, Wallis reports, if these were not enough, Now the Murray financial services reform, well this is simply plagiarism of the former UK reforms that failed. The UK is still trying to recover.

    Who on earth employs a has been, like David to make financial reform? Oh yes I forgot Bill Short one he does.

    like PI is not hard enough to get now keep going and no Pi will be available to planners not aligned to banks or insurance companies .

    Banks double dip, insurance companies double dip , Governments double dip why not continue to do so.

    Double dip into the future of our future, our children’s future and security,you have already taken away 100 million dollars in adviser service fees, who do you think you are?

    So, how do they combat that loss? The banks are with extra fees, on mortgages, savings accounts and transactions.

    The tightening up of low interest rate loans now moves to much higher products, the banks don’t suffer they never do.

    the banks are more sustainable now than ever, David Murray should go back to Ireland and take his mate from Qantas with him.

    The banks profits are the highest in history, they should be held accountable for the use, abuse and continued misuse of investors funds.

    David was don’t forget, the head of Commbank when it was at the centre of investigation, the Commbank repossessed more Australian homes than any other institution under his rule, in Australian history, now the Commbank was investigated for third line forcing under his rule, under his rule the Commbank had its first enforceable undertakings. Intercultural has not changed just its mask.

    Commbank has been the centre of many scandles, David Murray at the helm of some and we rely on him to give advice? Why ? How on earth did he get the job?

    These changes will do to the financial services industry a damage, likend to cyclone Tracey, what in Gods name are we doing then, leave it alone Shorten, leave it alone.

    Patrick

  40. Those that pay the commissions should have dealt with this issue years ago Australia, New Zealand or wherever. Damn shame others have to take the lead and make the case for change. Does this not simply highlight the difference between an industry and professional level of service and…….should not any upfront fee compliment the clients situation always putting the clients best interest first? Yes it can be tough running a business these days but those operating smartly and prepared to make (sometimes significant and difficult) changes will usually find a workable way forward.

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