Latest Poll – Which Door?

The most likely short to medium-term future for my risk advice practice lies in:
  • Retaining my current personal advice proposition (40%)
  • Selling my book of business (28%)
  • Not sure (16%)
  • Remaining a consultant to my clients while 'outsourcing' the personal advice (7%)
  • Moving to a general advice-only model (6%)
  • Another scenario (3%)

Our latest poll asks about the vision you have for the future of your risk advice practice.

We’re asking this question based on our reporting this week of more activity in the advice sector which is seeking to offer alternative futures for some advice businesses (see: Life Plan Expands Offer…).

Many advisers/owners of risk specialist advice businesses are considering exiting the sector in the short-to-medium term due to one or more factors which include:

  • Capped remuneration restrictions via the Life Insurance Framework reforms
  • Requirement to pass the FASEA Adviser Exam by 1 January 2022
  • Minimum education requirements required by 1 January 2026

Quite apart from the impact these critical regulatory reforms appear to be having on adviser numbers, the advice sector is also in the process of witnessing the natural attrition of the Baby Boomer generation of advisers and advice business owners who are – in any case – moving to the next stage of their career and their lives.

Within this current environment then, in which the combination of regulatory reforms and Baby Boomer retirements is having such an impact on adviser numbers, the market seems to be working hard to try to establish new or more creative alternatives for advisers and advice businesses who prefer to continue their business offer – either with the same or a potentially alternative advice proposition.

We’re not advocating the new alternatives that firms such as Life Plan or Australian Financial Advisory Network are proposing – and these alternative offers may not necessarily be a good fit for you and your business. But the ‘general advice’ or ‘consultant’ models may well represent a possible good fit for some.

Cast your vote and we’ll continue the conversation next week…


  1. The issues mentioned above are not deal breakers, but the compliance regime that we are expected to operate under is. I can’t see how it is possible to operate as a commission based risk specialist and comply with Standards 3 & 6 of the FASEA Code of Ethics. Consent forms for existing clients have already been decreed, and (if risk commissions are allowed to continue) how long will it be before we are swept up in the issuing of annual renewal notices to retain ongoing commissions? IMO the only way forward for risk specialists is to operate under a separate Code of Ethics and Best Interest Duty that is relevant for that scope of advice. All rhetoric coming from the regulators indicate that this is not even on the agenda, so it can only be surmised that there is no place in the industry for risk specialists into the future. What a disaster for clients to be pushed into dealing directly with the insurers direct distribution arms or holistic financial planners who (with exceptions of course) either won’t be able to afford to give the advice or won’t have the expertise to deal in such a specialised field.

    The General Advice option is interesting and probably comes across as unusual to most as it is so very different to basically every model we have seen for the last decade, however a lot of general brokers operate under this model very successfully.

    I would like to say that I think that some common sense will prevail, but the clock is ticking awfully fast and there is simply no light at the end of the tunnel.

    Good luck to all.

    • I agree with Matt entirely. All the changes to the industry prior to and after the RC are designed to ease out as many advisers as possible. From FOFA, LIF to FASEA and beyond. In order to survive we have to think outside this box that is closing in on us rapidly, we need to look at new ideas and alternatives. I had hoped to sell my book and retire by now, but values have dropped and I have no choice other than to consider what other possible options there might be. Yes indeed, Good luck to all of us.

      • Good points Dark Knight, and I also agree with Matt’s comments above. Unfortunately, it’s not just the regulators. The retail life insurers are still not fully on board. It seems that a number now concede that commissions need to stay, but they’re pushing for nothing above the 60/20 split. As a result, and I have no doubt, that the BDM’s are under instructions to stress to advisers LIF in it’s current format, and FASEA are here to stay. And yet, adviser numbers are down, as it was reported a few weeks ago; and of those who remain, many, for whatever reason, will not meet the FASEA education standards and exit. I’ve said it before and I will say it again – the only way out of this mess is for the CEO’s of the retail life companies, the FPA and AFA, and maybe the major licensees, to go to the govt collectively, and present a watertight case which clearly shows what will happen to this industry if things run their current course. The longer this is delayed, the longer any recovery.

  2. Wouldn’t it be better if there was some attention focused on the issues that might change the tide of the industry?

    Let’s assume the current set of life insurance products are profitable. *cough* Excuse me, I have a nervous tick when I say silly things.

    There is a lot of focus on premium inflows of the industry. But these numbers are masked by age increases, CPI and rate increases. Wouldn’t a more terrifying number be actual number of lives insured? That number has probably been declining for longer than the premium inflows. But life insurance employees are entitled to Bank holidays so they assume they are immune to the laws of nature.

    Speaking of circling the drain, aren’t adviser numbers declining at a rapid pace? How is the average age of an adviser looking? Is that number still below 60? Probably. Just.

    You don’t have to be a rocket surgeon to put 2 and 2 together yet somehow the industry keeps coming up with an answer of 5.

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