Latest Poll – The Future of Risk Commissions


Do you think life insurance commissions will eventually be banned in Australia?

  • No (57%)
  • Yes (30%)
  • Not sure (13%)

Questions stemming from the Insurance Round of the Banking Royal Commission, and the responses they have generated, has prompted our latest poll.

What may have been unimaginable to many practising advisers at the beginning of their careers is now something that might actually happen.

But, could it really happen? Could life insurance commissions actually be banned?

Industry stakeholders have been quick to jump to the defense of risk commissions, with the AFA using the most strident language in that defense, stating last week that “The banning of commissions on life insurance in Australia would be a global experiment, the likes of which have never been seen previously…” (see: Removal of Commissions Would Damage Insurance System).

The FPA and FSC have each weighed in with their own objections to the notion that risk commissions be banned, joining with the AFA in pointing out the Life Insurance Framework remuneration reforms, which have only just been implemented, have already thoroughly addressed the question of adviser remuneration.

Even ASIC has declared it won’t be touching risk commissions until at least 2021, when its review of the impact of the Life Insurance Framework reforms is due to be delivered (see: Insurance Commission Not Under Review Until 2021…).

But what might happen beyond 2021? Will momentum continue to build that will eventually see the banning of life insurance commissions? Or do you think the industry will be spared this possibility in favour of a long-term solution based around the 60/20 formula presently stipulated in the Life Insurance Framework?

We’re not asking whether you believe risk commissions should remain. We’re asking whether you think they will.

As always, let us know what you think and we’ll come back to you next week.


  1. Should they be banned? No. Will they be banned? With the vested interests involved, quite possibly. And sitting back thinking it can’t happen will only give those seeking a ban the opportunity to get their way.

    • It’s the reason why advisers need to engage with politicians otherwise they’ll make decisions for us that will be financially ruinous.

  2. The industry and consumers will suffer enormously if risk commissions are banned – and then the Government and the ‘so-called experts’ who’ve already retarded this industry and caused a significant new business decline, will see the error of their uninformed, PAYG-mentality ways and bring things back.

    Life insurance plays an enormous role in protecting Australians. The Government and ASIC have already made it near-impossible for advisers to survive in this industry. If commission is removed…I’m out too!

  3. a new offer to deliver insurance is on the way, payment for service is also new, watch all spaces. ” give people what they want – not what they are used to getting”.

  4. The Life Insurance Companies always look at the most profitable way to sell their products to the market.

    Unfortunately, many Life Companies are yet to grasp what is happening in the way people think and that a lack of understanding from people in the Life Industry, of their own Industry, in conjunction with a Brave new world where Life Company executives are hoodwinked into believing that new fads are the future, has led us to the current fiasco.

    It has become the blind leading the blind to a destination where the lunatics run the asylum.

    Commissions will die if the Life Industry is set on destroying the Retail Advice arm, either through ignorance, or short term greed.

    Either way, it makes NIL SENSE.

    On a positive note though for public servants, when it all starts to fall apart, then it will be a case of major Government funding increases to ASIC and all the other Government bodies, to work out a solution for the collapsing Life Insurance sector.

    As previously stated, the blind leading the blind when it comes to understanding that Life Insurance advice, is the engine room, not the toilet.

    ( Though toilets are also important and what a mess we would all be in without them. )

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