- Agree (83%)
- Disagree (13%)
- Not sure (3%)
Advisers have once again sent a very clear message around what is needed to sustain a viable risk-focussed business.
The results from our latest poll reveal an overwhelming 85 percent agree that an 80/20 risk model is needed.
This tallies very closely with the results from the same poll question when we asked it two years ago, on the eve of ASIC’s 2021 review of the quality of life insurance advice.
In February 2021 nine in 10 of those taking that poll (89%) agreed that an 80/20 hybrid commission model for life insurance advice can form the basis for a sustainable risk-focussed advice business, whereas the 60/20 model could not.
However this year has seen a very slight shift in adviser sentiment with 12% of respondents to last week’s poll disagreeing with the statement, while in 2021 only 6% of respondents disagreed.
Could this imply a small proportion of advisers have adjusted their business models in the intervening two years?
Advisers now await Minister Jones formal response to the recommendations contained in Michelle Levy’s Quality of Advice Review – which has recommended risk commissions should be retained.
But, as noted last week, it appears the 60/20 commission caps presently mandated under the Life Insurance Framework reforms will be retained but again, this has yet to be confirmed.
In the meantime, our poll remains open for another week…
It’s great to see that so many people feel that if commissions return to 80/20 then risk advice will return to being a viable business (not that I’ve seen anything by the decision makers to suggest that this is even on the table). For mine though, if we’re stuck with the current compliance regime and code of ethics the risk advice is never going to viable, irrespective of the commission rate.
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