Early results in our latest poll suggest basic commercial considerations trump the proposed experience pathway for advisers when it comes to their ability to continue to deliver life insurance advice in future. This one-sided interim result makes it our Story of the Week…
- Moving commission caps from 60/20 to 80/20 (65%)
- Implementing an Experience Pathway for advisers of good standing (16%)
- Other initiatives (9%)
- Reducing the commission clawback period from 2 years to 1 year (6%)
- Not sure yet (3%)
Our latest poll is intended to serve as a reality check for what’s most important for advisers – risk specialist or otherwise – when it comes to continuing to offer life insurance advice in the years ahead.
With the Federal Election now on your doorstep, both major parties have made commitments to pursuing an experience pathway for ten-year plus advisers of good standing, while both the Coalition and now Labor appear open to the prospect of retaining risk commissions at their current caps at the very least – subject, of course, to the outcome of the Quality of Advice Review at the end of the year.
many advisers ask …why they should be penalised if circumstances beyond their control lead to life policy cancellation inside two years
Flying under the radar for some advisers – but incredibly important for many – is the present mandate that commissions must be clawed back if life policies are cancelled within the first two years. This current requirement under the Life Insurance Framework reforms generates much feeling among the adviser community, especially for those whose advice has been delivered in good faith and when the reason for cancellation inside two years is totally beyond their control. Based on the fact that dealing with adviser conflicts of interest and observing client best interests have variously been written into statute in the FoFA and LIF legislation, many advisers ask Riskinfo why they should be penalised if circumstances beyond their control lead to life policy cancellation inside two years.
The future remains uncertain when it comes to the relative capacity for advisers to deliver life insurance advice in a commercially viable environment, and we look forward to your votes and your comments as we continue this critically-important conversation…