Perhaps unsurprisingly, the strongest engagement among Riskinfo readers this week was around a call for the industry to return to 100% upfront commissions in order to stem the continuing exodus of risk focussed and risk only financial advisers from the Australian market…

Up-front commissions on life policies and other risk products should be moved back to 100% to incentivise advisers to retain risk advice in their client proposition, suggests Radar Results’ John Birt.

Writing in the firm’s newsletter last week, Birt says the Government wants more Australians covered by more life insurance and financial planning advice “…but they have done the opposite by providing less income to the advisers by having non-commercial claw-backs.”

John Birt …thousands of life agents and advisers have left the industry due to the lower commission levels

Birt outlines how the maximum upfront commission payment is currently set at 60% with renewal commission payment at 20% on life insurance policies and other risk insurance products, noting that before this prescribed setting under the LIF reforms, up-front commission payments were 100%+ of the annual premium.

He also referenced claw-backs of up-front commission payments for policies cancelled inside the first two years of commencement in stating:

…I’m still amazed as to why these limits were imposed in the first place…

“I’m still amazed as to why these limits were imposed in the first place. I have not seen any premium reductions by the insurance companies, who are now paying lower commissions.”

Birt adds that thousands of life agents and advisers have left the industry due to the lower commission levels, “…and many more will.”

“Back in the 80s, some life products paid 150% commission, and I know the consensus is that this leads to churning to make a commission, but it can be managed with the right conditions and monitoring,” he says, adding that this is now ”… illegal, heavily monitored, and totally against the Corporations Act.”


  1. John raises several very valid points here but his arguments are based on one thing no longer present in society and Government decisions today – logic and common sense!

    For that reason, I doubt they will ever be re-considered. If the demise of this industry is what they want, that’s definitely the trajectory we’ve been heading towards since 2013.

    The deceitful lies that people like Trowbridge and Peter Switzer told about ‘churning’ played a big part in this but its nice to see most of the people who made the decisions that have impacted this industry either voted out of office last weekend or told by their party they were no longer required.

    • Haha! Switzer! I’d forgotten about that sorry creature. Peter ‘buy stocks’ ‘buy stocks’ ‘buy stocks’ Switzer we’d call him. God knows how he ever got into an audience-facing job. He sounds like a droll underpowered 78 speed record player with a visage to match. Horrible creature! Don’t even start me on Trowbridge or even Lambie. How do these people get away with these things?

      • Its amazing Squeeky….just like the lying grubs that forced jabs on the public under the guise of the sky is falling pandemic, which as you and I know now lists as low as being the 39th or even 40th biggest killer in Australia – not even in the top 10 or 20, the inept and amateurish politicians who imposed their ludicrous ideas on this industry haven’t been held account either. Despite being a lifelong LNP voter, I am so pleased to see the most prominent of those grubs lose their posts in the last federal election.

        Switzer and Trowbridge also deserve a visit from the karma bus for what they did via their conflicts of interest.

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