A NSW adviser has released a discussion paper in which he argues the case for the retention of life insurance commissions as a valid and necessary component of the future life insurance ecosystem in Australia.
Approaching the eve of ASIC’s 2021 review of the quality of life insurance advice, second generation risk advice specialist, Brett Wright (KPRM Platform), outlines his argument for the retention of risk commissions by way of documenting the differences he says exist between the nature of advised life insurance on a commission basis and advised life insurance under a fee for service arrangement.
In his paper – Comparing Commission vs No Commission + Advised Insurance Alternatives – Wright breaks down various elements associated with the value of life insurance advice, such as ‘Getting Covered’ and ‘Reviewing & Renewing’, and how each of these elements works, or would work, under the commission model and the alternative fee for service model.
Wright also takes aim at the relative issues associated with consumers accessing life insurance via direct and group insurance channels, where he implies the consumer is better served by a personal advised life insurance solution, which better addresses the consumer’s needs and personal circumstances.
In the present environment where a total ban on risk commissions remains a possibility, Wright told Riskinfo he wrote this report “…with the sole purpose of starting open, honest, transparent and fact based conversations with politicians, regulators, life insurers, associations, licensees, advisers at the coal face, and most important of all, the consumers we serve.”
Lending support to his position, Millenium3 CEO, Helen Blackford, says Wright’s report outlines many of the key issues from a practitioner’s point of view that lead directly to the accessibility and affordability of Life Insurance: “If an industry construct is further created through decreased commissions where restrictions are placed on a consumer’s ability to access and afford advice, the social and community impacts will result in broader under-insurance, financial hardship for Australian’s in their time of need, and as a result an increased demand on the welfare system.”
Later this week, Riskinfo will report a series of comments made by a selection of key industry stakeholders in response to Brett Wright’s Advised Life Insurance paper, each of which supports the call for the retention of life insurance commissions as an outcome that will offer the best chance for more Australians to access quality life insurance advice…