- Yes (64%)
- Not sure yet (15%)
- It makes no difference (14%)
- No (7%)
Our latest poll is checking on how you think the result of last weekend’s federal election may impact your advice business.
We’ve reported elsewhere that feedback to Riskinfo this week suggests there’s a more optimistic mood among advisers and licensees about the future of their advice businesses (see: Returned Coalition Government Eases Pressure…), but we’re keen to hear from as many advisers and other industry stakeholders as we can.
We’ve yet to speak with anyone in the financial services sector who is anything other than pleased with the return of the Morrison Government, and while we’re not in the habit of running ‘Dorothy Dixer’ poll questions, we’re very keen to learn about what the election result means to you and the extent to which your own view is reflected (or not) by your peers.
We appreciate there remain issues that are critical to the ongoing viability of many advice businesses in a changing regulatory world, and don’t for a minute think that a returned Coalition Government will suddenly deliver outcomes desired by advisers and those who advocate on their behalf.
Nonetheless, we’re very interested to gauge your view on whether the surprise return (for most) of the Morrison Government has changed your thoughts about the future of your business.
Tell us what you think and we’ll report back next week…
Can someone please answer – is this survey for Risk Specialists or does it include planners as well? The reason I ask is because planners may be more optimistic now that gradfathered commissions for example will likely remain with a returned Coalition government, but Risk specialists still have to deal with LIF and FASEA.
The return of the Morrison Government means there is room for negotiation.
Life risk specialists however, are still in trouble if the current restrictive regime continues.
There must be a concerted effort by the associations and Life Companies to rigorously put to the Government that the very future of the Life Insurance Industry is at stake.
The Life Companies mouth piece, the FSC is the last entity that should be representing adviser business interests, unless they are told what to say, as quite frankly, they cannot be trusted to do or say the right thing,
The AFA are presenting a good case and unlike the FPA, have an understanding of the real issues facing Life risk advice practices.
IFA risk advisers will not survive until the AFA and the FPA cut the dependent umbilical cord to the purses of the life insurers and fund managers. Until they do that they have no real credibility in arguing our case.
As we speak there is a confirmed 25% drop-off in genuine new business i.e. premium revenue which is not associated with indexation offers or advised increases to existing policies, originally written under the pre-LIF commission rates and in particular responsibility periods. Most of the published information I’ve seen is very carefully worded and designed to mislead some in the industry that all is well premium flow wise
Some insurers are engaging in spin and posturing when they publicly announce that they’re in favour of the retention of risk commissions. At what level? What will the clawback period be – if it still two years clawback it’s just a joke. To my knowledge no insurer in recent times has argued for the return of the clawback period to one year. And anything below 88/22 will result in even more drop-offs in new business
The insurers, and their lobby group the FSC, clearly think now is not the time to argue for the return to a one year clawback, as they consider there is still an advantage for them in LIF with its two year clawback.
At a seminar this morning on the business insurance, I raised the question as to why any adviser considering entering the business risk market would take commissions. You can do a lot of work on a business case and have the whole thing fall over early, or fall over a year after you’ve signed up a businesses key person, and he has an argument with the directors and bolts. Ouch!
It has to be fee only in the business insurance market!
I honestly don’t believe that our life insurers understand that if advisers go to full fees, driven by a need to get paid properly without threat of clawback, then advisers will not be doing all of the administration work surrounding life insurance policies, that has been passed on to us in recent years.
The current retention budgets of most insurers will need to be quadrupled when an adviser has no skin in the game.
We have provided advice for many years to the Business market and unfortunately Business owners have the same mindset as personal risk advice clients, in that they will not pay a fee for Business risk advice that even covers a fraction of the work that is involved.
It is not their fault, it is the way Australians think and have been conditioned.
This will not change, as most Business owners are working harder, have less time to think about the risks to their Business and with less thinking time, comes less awareness of the importance of the intricacies and how Key Person Insurances are vitally important to them and their Businesses.
Commission is the only way forward for Personal and Business Insurance and a One year responsibility period for any lapses that have nothing to do with the adviser is the fairest way to protect the interests of Insurers and the advisers who need some security to survive.
Winter is coming. Its time we all accept it and move on.
No one cares about advisers as it does not suit their political agenda.
The sooner we stop whinging and get on with it the better chance we have of surviving.
The following might be a bit off-point, but in my view, needs to be said.
It seems likely that the newly re-elected government will continue with its agenda in the financial services industry. To me, it matters not which party had won government – neither is favourable to us. So we just have to go with the flow.
However, what is needed now with the cuts in commissions and which of course severely limit our incomes, is that the insurers we deal with ramp up their own responsibilities in respect of submitted business. What do I mean?
Well, their systems aren’t geared up for efficiency, at least as far as we’re concerned. Never in our 25 years of being in this business have we experienced the servicing needed to maintain a client base as we do now. Life offices don’t do anywhere near enough follow up to get business on the books, especially with PMARs etc. And GPs take so long to get reports back we wonder why these haven’t been the subject of complaints, nor targeted by ASIC or other— dare I say relevant—regulator bodies? These are the single biggest obstacles to getting business completed and they can do what they like with impunity it seems.
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