Advisers Would Opt For Hybrid

The existing hybrid commission structure would be the favoured remuneration alternative if advisers had to choose between the five options presented to them in the Life Insurance and Advice Working Group initial report.

This is the outcome to date in our latest poll, in which two thirds of respondents have opted for the existing industry hybrid commission structure, if their choices were confined to the five options presented.

Modified hybrid commissions is the second most-favoured remuneration alternative, at 13%, closely followed by level commissions plus fees (12%), tailing off to the other two level commission options.

Expressed another way, 80% of advisers taking our poll have said hybrid is the way to go, if upfront commissions were no longer offered, while 20% believe one of the level commission options is preferable.

As we said last week, this poll only includes to the five remuneration options presented in the LIAWG interim report. It doesn’t include a nil commission (fee only) option, nor does it offer the status quo (retaining upfront commissions).

Your comments to date have indicated some dis-satisfaction with being restricted to having to select between these five options only. Advisers have also reiterated the often high costs associated with a typical adviser/client life insurance advice process, which continue to increase, in part, due to greater compliance requirements. One adviser has also made the point, shared by many in previous debates, that product outcomes and remuneration options, in the vast majority of cases, take second place to the actual advice that is delivered to the client.

As emphasised by LIAWG independent Chairman, John Trowbridge, the interim report is an issues and options paper that doesn’t make recommendations – “… it simply airs all the issues.” And as our poll remains open for another week, submissions to the LIAWG (via email to: submissions@trowbridge.com.au) will be open until the end of January.