Latest Poll – Risk Advice Business Viability

Our latest poll revisits a question we asked you two years ago on the eve of ASIC’s 2021 review of the quality of life insurance advice, on the assumption that the review recommended the retention of commissions as a valid and acceptable form of adviser remuneration.

As it transpires, the Michelle Levy-led review – ultimately conducted through the Treasury – has recommended risk commissions should be retained, but this has yet to be ratified by the Government.

Reading between the lines, it appears the 60/20 commission caps presently mandated under the Life Insurance Framework reforms will be retained but this, also, has naturally yet to be confirmed and ratified.

If the Government does accept the Quality of Advice Review recommendation to retain risk commissions – and at the current 60/20 caps, what will this mean for you and your business – risk focussed or holistic? Given every advice practice possesses its own DNA, this outcome will have different implications for every firm.

Two years ago, however, you told us very clearly that a 60/20 commission model will not be commercially viable, but an 80/20 model will sustain and support a viable risk-focussed advice practice.

Does this strong majority opinion you held two years ago still hold for you? Or have you been travelling down a path that might deliver a viable and profitable risk advice practice at the 60/20 level?

We’ll wait until next week’s report to compare this latest poll with the results from early 2021, and welcome any thoughts or comments you may wish to contribute, as the countdown to Minister Jones’ formal response to the Quality of Advice Review recommendations ticks ever-closer…