Commission based models for life insurance have not been able to address the issue of under-insurance and have added to the mistrust of financial advisers according to a whitepaper released by three financial services professionals.
The paper, And the walls came tumbling down, released by Fortnum Financial Group, executive chair, Ray Miles; Innova Asset Management, managing director, Dan Miles; and Certainty Advice Group, managing director, Jim Stackpool, also states that any person who receives payment from the sale of a product should not be called a ‘financial adviser’ but rather ‘product providers’.
In the paper the three authors claim incentives are the single biggest problem and main cause of mistrust in financial advice by consumers but yet remain inherent since most advice is provided by financial institutions which benefit from the sale of financial products.
“Australian investors don’t trust financial advisers to act in their best interests, even if it is the law…”
“Unfortunately, financial planning has become inextricably linked to product selling and conflicted remuneration. Australian investors don’t trust financial advisers to act in their best interests, even if it is the law. If the industry is to earn the trust of investors, it must separate financial product and advice,” the paper stated.
“The majority of advisers aligned to an institution don’t actually sell advice. They sell product although they’ve done a superb job of passing product off as advice and persuading consumers that their ‘advice’ is trustworthy and will deliver confidence, peace of mind and security.”
However, the paper also highlighted that life insurance advice was primarily driven by commission sales with incentive-based commissions accounting for 82 per cent of transactions, but this model had not reduced the level of under-insurance despite it being in place for many decades.
“It’s concerning that life insurers continue to lobby against changes to adviser remuneration by claiming such reforms would exacerbate Australia’s underinsurance problem,” the paper stated.
“…almost 100 years of a commission laden approach to insurance sales hasn’t improved the underinsurance problem…”
“Notwithstanding that almost 100 years of a commission laden approach to insurance sales hasn’t improved the underinsurance problem, a recent review of life insurance files by the Australian Securities and Investments Commission found many consumers of life insurance from a financial adviser would’ve been better off without it.”
“ASIC’s study concluded that more than one third of advice was inappropriate and failed to comply with the law.”
The paper also set a tighter framework for who should be called a financial adviser stating the definition should be separate from any form of product promotion or sales.
It stated that any person who received payment from a product or tied the value of their business to a product manufacturer’s Buyer of Last Resort arrangements should be called product providers where as financial advisers have no product bias “so there’s no question about the integrity of their valuable advice”.
The paper also doubted the effectiveness of past and current regulatory changes claiming they were built on a foundation of conflicted interest and product based remuneration would make it difficult to successfully build a new advice model separate from those past behaviours.
“The latest round of proposed changes…may ensure that future advisers are tertiary qualified and abide by a code of professional standards overseen by a new professional membership body but they won’t propel the industry forward or lead to better client outcomes.”
“The current approach bears a striking resemblance to the many failed past attempts. Despite numerous inquiries and reforms in the last two decades, there has been no fundamental change or improvement. The majority of advisers are still distributors of financial ‘advice’.”
To quote Ray Miles “a recent review of life insurance files by the Australian Securities and Investments Commission found many consumers of life insurance from a financial adviser would’ve been better off without it.”. Can Ray Miles actually back up this statement with hard evidence? We are all of the understanding that the circa 200 files specifically targeted by ASIC led to doubts on some of the replacement advice given with upfront commissions as you would expect when they have specifically targeted advisers they had concerns with in this respect in the first place and the advisers who do the right thing will all be made to suffer.
However this is the first I’ve heard that ASIC actually stated that ” many consumers of life insurance from a financial adviser would’ve been better off without it.” If this statement cannot be backed up by Ray Miles than he should be issuing an apology and this article retracted. Come on Riskinfo, lets see some facts backed up on this statement by Ray Miles.
Reality Check – we are looking into that particular claim in the whitepaper and will update this story as soon as we receive a response from the authors.
What a load of rubnish The cost of cover is the main reason behind the underinsurance issue
It’s cash flow for most working families and food on the table comes before life insurance a will and other important issues they also tend to think they don’t need as it “won’t happen to them ” 4999 advisers have already explained 4999 times that your average family won’t pay a fee for something they can get over the phone from a direct insurer Commissions don’t create mistrust Badley researched articles like this do
If a car manufacturer were to receive an ongoing fee from the purchaser would it be fair that they continue to receive a trail, particularly if it subsides after sales service? The bloke who cleans the dunny at a life insurance company receives trickle down payment (pun intended) from my clients premiums, yet its wrong for me; the fellow who had to understand and recommend and maintain? Gee, I would hate to think how many times that I’ve serviced clients to stop policies inadvertently lapsing and so on. Imagine asking for a fee for that?????????
I’ve come across plenty of cases where the client would financially be better off without it.
Recent example being a client who had a significant debt against a business he owned (deeply negative equity – close to $1m). We setup a Trust to hold his assets so that we could protect them from creditors and made a Binding Death Benefit nomination on his super, payable to his wife (to circumvent it being directed to his estate). His wife was on a decent salary, which paid for most of their living expenses, including rent.
Did he “need” to have insurance? No. If he were to die tomorrow the company would be liquidated, the lenders (which included some extended family) would be out of pocket and his wife would receive his super and Trust assets….that’s that.
Morally and ethically the answer is different.
In the end he ended up deciding on taking some insurance to fill this gap – would ASIC frown upon our advice? Don’t know. Probably. But I can tell you that it helps him to sleep better at night knowing that if he did drop dead tomorrow he has fulfilled his obligation to those who depended on him.
**And as anyone here would know, $1.08m life insurance and $178k Trauma (which is what we went with) for a 52 year old non-smoker is typical of a case that costs our business more than the commission paid to us.
Could you have come up with a better example? That was cringe-worthy. I have some serious questions about your strategy. My first thoughts were, this person needs to learn about what Insurance is in the first place.
If you transferred assets to a trust for the sole purpose of avoiding creditors knowing your client is in trouble, I’m sorry for your client, because a trust is not going to protect them in that scenario.
Agree, Katherine. However the way things are structured this isn’t an issue. Trust was in place years before he got roped into buying the business and he’s not been contributing to super since he bought the business. The point I was making is that his immediate family – his wife and kids – have ample financial resources if he was to die. Hence he (or perhaps more correctly his wife/kids) doesn’t “need” insurance. He, however, feels a sense of obligation to his creditors.
Hi Reality Check. The point you are questioning was actually written by Jim Stackpool in the white paper. And like you, I have never heard that “many consumers of life insurance from a financial adviser would’ve been better off without it”. Your question needs to be answered, where is the evidence of this Mr Stackpool?
Riskinfo has seen a number of so called “experts” and “consultants” contribute in the recent past with articles (for example) on the idea that consumers are happy to pay a fee for service to their risk insurance only adviser AND an insurance premium, Yet when asked to back up those claims with evidence in Riskinfo, they never would.
Unfortunately this is yet another example of so called “experts” putting forward unfounded and silly comments. Really guys, you are not just showing how ignorant you are, but how foolish you are!
To paraphrase Rob Coyte – it is not about how we are paid, It is about ousting the churners!
Thanks for clarifying WB. According to the trail below Risk info will be asking for clarity from the author for this statement. I don’t hold out much hope for either factual justification or an apology from them.
Unlike the authors of this white paper, Risk advisers recognise there is a need for the few very few high net worth customers to have their risk serviced under a fee AS PART OF their other financial planning needs but for the vast majority of customers this is simply not an option and they much prefer and are better off with adviser commissions vs fees as we all know.
The problem with these so called “experts” is that they have a personal agenda to reduce their competition and to hell with the mum and dad customers and the consequences.
Writing this in-factual rubbish for personal gain is as bad as purposely giving bad advice for personal gain in my view.
Publishing this in-factual rubbish without proper due-diligence checks is just as dangerous.
Thanks for clarifying WB. According to the trail below Risk info will be asking for clarity from the author for this statement. I don’t hold out much hope for either factual justification or an apology from them.
Unlike the authors of this white paper, Risk advisers recognise there is a need for the few very few high net worth customers to have their risk serviced under a fee AS PART OF their other financial planning needs but for the vast majority of customers this is simply not an option and they much prefer and are better off with adviser commissions vs fees as we all know.
The problem with these so called “experts” is that they have a personal agenda to reduce their competition and to hell with the mum and dad customers and the consequences.
Writing this in-factual rubbish for personal gain is as bad as purposely giving bad advice for personal gain in my view.
Seems to me that Ray Miles has a guilty conscience about the “Products” he has been selling! Cannot believe the total drivel being espoused in this blatantly self serving article!
The statement “Australian investors don’t trust financial advisers to act in their best interests, even if it is the law.” is ludicrous. Back it up please.
And.. ““Notwithstanding that almost 100 years of a commission laden approach to insurance sales hasn’t improved the underinsurance problem,” – you are naive if you think that Advisers are responsible for this situation. The premium renewal based funding model may also play a role here – so it becomes more of an affordability issue than a commission issue!
Mr. Miles, if your intention is to promote Fortrum – F A I L !
Good luck.
What a load of nonsense. Those who need insurance the most (because of high reliance on their ability to generate income) would not and could not afford the fees to make and implement recommendations.
I agree with Geoff S. below – “total drivel”. This article flies in the face of what entrepreneurial types have done for centuries – i.e. linked a need with a product which fills the need. Benjamin Franklin did it in America in its infancy, as a case in point, and I’ve never heard of his being labelled a “product provider” as implied in this paper. Franklin published a almanac (advice), yet his almanac accepted paid advertisements. He also published details of his own inventions and blatantly advertised them in the almanac. Ben Franklin knew his way around business; he was commercially savvy and died respected and wealthy because if it.
To the three authors: get real. If you want to comment about matters like this read your own papers before publishing to see them from your readers’ perspective.
NEWSFLASH: Everyone in the world economy receives a payment for their services. Financial advisers are subject to a disclosure regime that would rank above and beyond 99% of participants in the said economy. To argue that how financial planners get paid is missing the point.
The real issue is that licensees and regulators need to take appropriate action against financial advisers that don’t follow the existing law and act in the clients best interest……END OF STORY.
Rob, you are absolutely correct.
Unfortunately though, there are too many lobbyists, so called “experts” and “consultants” not to mention the FSC and now I can add the silly comments in the above article, who have all challenged the way risk advisers have been paid and this misinformation has been passed on to the govt. Therefore all of that must be addressed, which is why we now have (thankfully) the LICG.
And to quote: “Australian investors don’t trust financial advisers to act in their best interests, even if it is the law”. Wow. Fellas, not sure where you got your sample from, but if they’re your clients I’m guessing you’re not doing your job right.
The authors also assert that commissions are the driving force/motivation behind risk advice, yet also seem to suggest that commissions haven’t succeeded in addressing issues of underinsurance. This is wrong on both counts (we will always have some level of underinsurance because there will always be clients prepared to “run the gauntlet”).
As an adviser who doesn’t get involved much in the risk space anymore, I look at these comments and shake my head. They forget that our starting point should always be “how can we best serve the client”.
Actively working toward a scheme of arrangement that produces less competitively priced products, lower competition among distribution channels, greater incentive for advisers to simply leave a client’s insurance arrangements “as is”, and perhaps most importantly putting the cost of advice out of reach for the middle and lower-middle income clients is not only foolish and elitist, but it shows how out of touch the three authors are.
The positives I took from this article is that there are now 3 names I can add to my list of “questionable characters” (which is a bit of a shame, as back in the day Stackpool had quite a solid reputation with my colleagues and I)
“It’s concerning that life insurers continue to lobby against changes to adviser remuneration by claiming such reforms would exacerbate Australia’s underinsurance problem,” the paper stated. REALLY? From what I’ve seen over the last 18 months or so, some life insurance companies are trying to get the government to reduce commissions and don’t give a stuff about the underinsurance problem. Just as long as they get their bigger chunk of the pie.
What a lot of self-serving tripe.
I have read the so called white paper and you have to question the competence of the three financial services professional’s research when they cannot even get the former assistant treasurers name right. Last time I checked it was Josh Frydenberg not Josh Fredenberg. Too busy bagging those pesky insurance advisers I suppose to worry about accuracy.
The real reason there is an underinsurance problem has more to do with premium costs (including ever increasing base rate rises by insurance companies) and the “she’ll be right” mentality of the average Australian where a large percentage don’t think it will happen to them.
Making insurance fee for service will just increase the underinsurance problem as it will make insurance even more expensive at the implementation stage. Many clients are also not concerned about possible premium savings in future years if they have to pay substantially more now, as they don’t know whether they will be in a position to pay for the same levels of insurance cover in 3 or 4 years with changing job and family situations.
Let’s face it, even advisers don’t know when the next round of insurance company new product series or base rate increases are coming anymore, so who can blame the consumer for being suspicious of long term premium costs.
Next thing we know Risk Advisers and insurance commissions will be blamed for global warming, that is if we are not already being blamed for it.
Once again all of the self appointed “experts” in this have missed the point. The reason that financial advice is not trusted in this country has nothing to do with the advisers – we have got the licencing system wrong at it foundation.
How is it possible for anyone to have confidence in a system when we use the same licence to allow product provision and advice? We need to do two things:
1) Create a new licence regime where a licence holder can be either a product provider, or an advice provider, but not both – and if you chose to be an advice provider, no related entity can own a product provision licence.
2) Have a legislated commission structure so that all product providers must pay the exact same commissions to advisers.
This fixed the problem completely and permanently. Conflict is eliminated, consumers can access insurance advice in an affordable manner, and confidence can be returned to the industry.
Why is it so hard for anyone to see this simple solution!
So now you want people – who are usually reluctant to talk about insurance anyway – to go and see an adviser first to work out what they need and then pay for this service, then go and find a ‘product provider’ (I presume he couldn’t be referred to one because that would be some sort of conflict in someone’s eyes) to sell them the product – and indirectly pay that person also via commissions?? Sorry, did I miss something? Who decides what sort of policy the person should have, what features, options, waiting periods etc it should have? Who decides the ownership structure? Who decides the affordability issue (another recent BS consideration)?The ‘adviser’ or the ‘provider’. If it’s the adviser then there is no way he can’t consider particular products, which means he must intimately know the workings of a wide range of products. Obviously he must gain this knowledge at his own expense and in his spare time. Or is it the provider? But if the provider starts recommending options, benefits, styles or ownership structures, isn’t he giving advice? I’m glad your solution is simple! Which one of these are you, if either?
Hi GregF, My take on it was stop letting life insurers provide advice via owned distribution channels? (regardless of their name if they owned by or have conflicted arrangement with insurer such as BOLR/if all comms same and no additional overides/incentives) Certainly if your take correct completely unworkable.
A very valuable and worthy contribution. I would allow for some innovation around commissions, though
By eliminating commissions you have eliminated an entire portion of the market. Regardless of how much emphasis you place on the value of your advice, the average Joe of Australia will not be able to afford it if we have to move to a fee structure. Doesn’t that defeat the whole purpose of what we do?
The change to a hybrid model theoretically fixes the churn problem but still allows anyone wanting advice to be a worthwhile client to a practice. What they are proposing will hurt the public more than it will help it.
I just read the paper ….I am struggling to see any discussion about the process of a customer obtaining insurance advice and the perceptions or otherwise of that process and payment for same. I point to studies of risk insurance and risk advice seeking customers which points to the evidence that as long as the customer knows the process for payment, why certain cover levels have been recommended and why certain providers have been recommended they have no issue with commission
So, let’s get this straight.
Ray Miles and Dan Miles are related and Innova Asset Management is 50% owned by Fortnum……that seems like an objective, non- conflicted basis on which to prepare an “opinion”.!
Ray Miles’ history is with MLC, AEtna Casualty and Life, Prudential, Associated Planners and Genesys, every one of which accepted, promoted and supported commission based payments to their agents, advisers and planners for both risk insurance and financial planning advice. In fact, I think it would be acceptable to say and well known that Ray Miles has done very, very well out of the payments of “conflicted” commissions to the businesses he has been involved with over many years and has profited from building large teams of “distributors of financial advice”.
As Wayne Leggett has been an outstanding contributor to the LIF, ASIC 413 Report, Trowbridge and Risk Insurance/commission debate for some time now, often making very logical and complete sense in his commentary, one can only assume that as a Board Member of Fortnum, he may be assessing this information with much interest.
This is unfortunately just one more example of self indulgent rubbish.
Hi, Craig.
Your reference to myself was brought to my attention by other readers. I am flattered by your opinion of me, so I hope my subsequent comments do not change that view. The first thing I should point out is that the comments attributed to Ray & Dan Miles were, in fact, made by Jim Stackpool and they are Jim’s opinions. I will not make any inference as to the views of Mess’rs Miles on the matter other than to draw your attention to their comments in the white paper.
For what it’s worth, I will share mine. I, like many other “old hands”, have done very nicely out of commission payments in the past. The key words here are “in the past”. It is my view that the removal of commission from the financial planning landscape is inevitable and this has been brought about by practitioners, themselves. Because we have been calling for recognition as professionals, we have to accept that a “professional” should not be remunerated by third parties. It will take a long time before this is the accepted practice, largely because it will take some time for people to understand and come to terms with a “user pays” framework. However, it will happen, just as we have moved on from the 8% upfront commission on investments that was accepted practice in the eighties. Note, these are my personal views, not those of Ray or Dan Miles, necessarily, nor those of Fortnum.
Just so I understand these 3 wise men who have come to a particular conclusion about commission based product selling, if I recommend an Income Protection policy that guarantees that a client will receive full or partial payment through injury or sickness if they lose 20.0% or more of their income and no other contract does, I’m a product pusher and I’m conflicted. By the way all other contracts require you to 80.0% or more of your income through illness or injury and require you to be totally disabled for a period to even get a partial payment.
If I recommend Life cover for an “arborist /tree feller that guarantees him a 25.% accidental injury cover should he lose an arm or a leg because most insurance companies won’t cover them for TPD and receive commission for finding the best product for hois circumstances then I’m a product pusher.
Here’s the thing, if the premium for any of these was $2000 and as a money hungry commission adviser, as we are all portrayed by these 3 wise men and others,, then I would receive approximately $2000 commission.
If I was to rebate my commission which at the moment is around 30.0% then the client would only pay $1400 for their insurance. At a very educated guess, do any of these wise men know how much I should charge for my time and knowledge. Conservatively if I charged between $1,000 -$1500 for my advice, who in this scenario is better off ?
Certainly not the client because at a stretch you 3 wise men think I can convince a client under the “value proposition” to pay $2,400 for something that would have otherwise cost $2,000.
Mr Miles in various forms when you were running Dealer Groups, you have negotiated deals with various institutions for the benefit of your advisers.
I cannot think of a more conflicted view of how you now see things.
This is not a white paper. It is a convoluted statement that is full of contradictions.
A white paper is an authoritative report that concisely breaks down a complex issue to allow people to understand the facts.
I am amazed that 3 experianced people, can make a generalised Insurance viewpoint, that borders on rambling.
The 9 page white paper, makes ridiculous assumptions around Insurance and seems designed to cloud the real issues, that this document has ignored.
Integrity and honesty when writing a document for people to read, is a must and if the article is tainted with self interest and lobbying to benefit your own Business at the expense of others and the greater good, then you will find that people have long memories.
There is merit in the argument against BOLR, Tied Arrangements, volume rebates etc; though to present an Insurance argument on a limited and targeted analysis of 200 files, shows either naivety or a vested interest.
I am sick of people linking Insurance with Investment advice and treating them as one and the same.
The statement on page 4; “The delivery of financial certainty, isn’t based on the delivery of product but rather the delivery of professional advice,”
is a hollow argument when a client with substantial debt and an urgent need to claim for Life Insurance Products, faces the loss of everything they have worked all their lives for, because they had advice, though no product to back it up.
To create credibility, separate Life Insurance and Investment advice, look at what people really want, will accept and is in the best interest of all Australians and the document will truly be a white paper.
Most of the 9 pages, relates to Investment and strategic advice and shows a complete lack of understanding around Life Insurance and it’s complexities.
This is an interesting contribution to the discussion.
The authors rightly point out that conflicted advice can never be trustworthy advice but they then describe a process of advice that I would estimate costs at least $3,000 per client. I wonder what would happen if I came to Fortnum and said “I have a budget of $25/$50/$100 a month, can you give me insurance advice?’
The underinsurance issue is a red herring. Making advisers better or even perfect would not solve the underinsurance issue. Industry funds did a great starting job on solving the underinsurance problem and have since run into major trouble with their insurance offerings.
I suspect this is a group of medium-to-high end client advisers proffering their way as the only way.
I disagree as that being the only way. It is an excellent way but not the only way. I find commissions perfectly acceptable provided I am not conflicted as otherwise most clients simply wouldn’t buy high quality insurance. It is alien to all but the wealthy to pay for insurance advice as much as it costs.
Hence the UK experiment is being wound back. My feeling is that if we would drop all commissions we will end up with a much worse underinsurance problem and a proliferation of the ghastly online and pay-tv insurance sales channels.
I am very surprised that people with the authors’ reputation are proposing a ‘solution’ that benefits very few outside themselves and will, as shown in the UK, make the underinsurance problem considerably worse.
I’ve never met Ray Miles, heard a lot of good things about him though. This article and his expressed opinions seem to fully contradict the good things I’ve heard. Unfortunately it appears the lobby groups and ‘some’ life companies may be having an influence on him. You know when someone isn’t being authentic about what they REALLY believe when they come out with the type of ‘CORPORATE-SPEAK DRIBBLE” that Ray has demonstrated in his comments. We have just been treated to that same type of dribble with Suncorp closing down our dealership – Guardian. So I am well versed in industry-types saying one thing and meaning another in their hearts. This commission argument is very old – been done before in the UK. Didn’t work. These gooses who can themselves consultants/experts should know they rolled back the changes in the UK BECAUSE it didn’t work!
.
They say they are working “in the client best interest” ABSOLUTE RUBBISH AND CORPORATE-SPEAK TO FURTHER THEIR OWN AGENDAS. They couldn’t give a toss re client best interest. Risk advisers are the only ones who seem to be attending to client best interest in this debate about risk commissions. I have not seen a single example of a life company caring about it! 2 year responsibility periods – give me a break – just more money for the life company. Plain as the nose on your face. It is up to the life company to fight against this if client and adviser interests are to be served. Well, the ‘fight’ is over and advisers did not win, only the life companies and the ‘experts’ they enlisted to comment. Thanks.
I couldn’t agree more with your comments Brian.
The consumer and the adviser have both been shafted with the impending changes.
Love your fight here Brian. I’ve been saying the same thing for months and have been told to zip it because what we could have got ‘would have been a hell of a lot worse!” Bah humbug! If us risk advisers sit and cop this, we’re as big a mug as the three fools who wrote the above mentioned ‘whitepaper’.
I agreed 100% Brian – riskies are the only ones with their eyes focused on the best interests of our clients. I see so many more ASIC bans directed at fee for service advisers than risk advisers so their argument fails to resonate with me – but it does anger me.
Just cut to the chase, you’ve developed, implemented a presumably profitable “fee for service” model in your businesses. And I think that is commendable for a “full service” Financial Planning business. Of the small amount of investment type business I’ve done over the past 10+ years I have issued a RCTI account and not taken any commissions or fees from the clients’ invested assets.
The above said, as a 95% “risk insurance specialist adviser” since 1987 AND an A.R. with a truly non-aligned AFSL, commission has been shown time and again to be the only proven way of providing for 100% of all new client referrals. Yes, I would like to boast that I only write “big cases”, but I don’t. I look after just as many “Mums & Dads” as I do SMEs. I simple cannot charge a PAYG employee $3,000+ for a $2,000 premium package that meets their individual protection requirements – N.B. $2,650 if you add back the commission “cost”.
We all have our agendas and it’s painfully clear what the “white paper” writers here have on their agenda. But one size does not fit all. Be critical if you must, but also be realistic and understanding of ALL potential client scenarios. Your pigeon hole simply can’t fit all of them in!
What an inciteful article – and yes, I spelt ‘inciteful’ exactly the right way – as opposed to ‘insightful’.
Well done RiskInfo, you’ve managed to attract the fired up opinions of many advisers today by simply releasing the opinions of three mislead individuals who clearly have their own agendas at play here and who have no understanding of the risk process.
Using the ASIC report to support their argument clearly shows they have no idea how that report came to be or how tainted it was in its findings. As Rocky’s trainer Micky told Rocky in that great movie ‘Rocky III”…’they was….handpicked!”
Hey Ray, Dan and Jim…I just had a conversation with a client of mine in NSW where I told him he’d just had $230,000 tax free dropped into his bank account after the COMMISSION PAID advice I gave him 3 years ago came home to roost. I think you’ll find that client has NO concern whatsoever with the way I was paid when I gave him that advice.
Booooyeh!
Just like the client I have who will be receiving about $150k, when at the time of meeting them their budget was very constrained, and it was a battle just to implement the cover (due to cost) which was only $65pm. I can tell you now, had I charged a fee then they would not have taken the cover at all. Even with receiving the commission I probably didnt make any money, but when you believe in something you just do it anyway….
Hey Claude, could not agree more and sorry for the slow reply. Despite was Peter Kell, John Trowbridge and Kelly O’Dwyer think, my business philosophy is (and always has been) look after your client always and the rest will take care of itself. I get no greater kick out of what I do than delivering on the promise I made to my clients when they’re facing their darkest hours.
Who else out there, bar maybe Tattersalls, get the honour of telling clients they just had hundreds of thousands, maybe even millions of dollars deposited into their bank accounts to help them deal with the pain and grief they’re currently experiencing. I always find it hard not to shed tears for my clients when those moments occur. So far, I’ve shed those tears on 14 occasions…
I find it an interesting position that Jim Stackpool, a person who ‘coaches’ financial advisers to start charging their clients BIG sums for advice (Jim advised a friend of mine that he should be charging $10,000 – $20,000 per client per year), should say that removing commission payments will solve the underinsurance problem.
Messrs Miles, Miles, and Stackpool don’t care about the underinsurance problem, because they’ve priced their services out of the market for 90% of the very people they claim to be so concerned about.
Commission doesn’t lead to a mistrust of advice – mealy-mouthed innuendo and fear mongering generates mistrust in the sector. Just because you charge a big fee, it doesn’t automatically make you a good adviser.
How’s the view from up there on your high horses, boys?
BANG! Great comments Josh…
Self interest always wins. Disappointing to see people bite the hand that has fed them.
I look at the direction set by the MLC Leadership 4 years ago on fee for service and this resulted in MLC crashing and booking a loss on sale of the life company in the region of $1.9billion dollars. Gee that was a fantastic outcome for a policy change.
ASIC are just doing their job and will unfortunately reap the benefits of being full of left wing lawyers who thing they can regulate an economy by over loading advisers with regulation impacts and expect advisers not to charge for it.
There will of course be a new charge from advisers to each client called the “ASIC regulation charge” of $500 per client paid up front.
More regulation and more upfront charges labelled ASIC Regulation charges. Ultimately this will result in political decisions as it did in the UK.
There is no such thing as free regulation.
The latest moves in the Industry are interesting with the Suncorp following this paradigm along with the ANZ so we can see some substantial losses very shortly.
How do these people even get air time, with this sort of rubbish? Sounds like a self promotion piece to me, to appease Jim’s conscience. I am sending all my mum and dad clients your way Jim, and wish you luck with charging them a big fat fee for giving them “financial advice” and sending them on their way to find a “product provider”. I guarantee none of them will raise the average for the underinsurance problem after meeting with you.
More self-promotion and arrogance.
By the way, I think you will find companies like Comminsure are the REAL reason people don’t trust!
This lot are exactly the reason why this industry is in such a mess. The egotistical nature of this “financial adviser” is exactly what puts off the average working Australian because in truth most in grey suits with grey personalities wouldn’t appeal to a cucumber let
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