Commercial Success for Risk-Focussed Advice?

It remains possible to sustain a commercially successful risk-focussed advice business model.
  • Agree (47%)
  • Disagree (36%)
  • Not sure (17%)

Our latest poll is seeking to gauge 2024 adviser sentiment for what has been a vexed question in recent years: Does Australia’s advice sector still have the capacity to deliver life insurance solutions on a commercially-successful stand-alone basis?

…And we’ve chosen the wording of this poll carefully, in that we’re asking whether – perish the thought – a risk-focussed advice business model can be commercially successful; not just commercially viable.

Similar conversations have previously been considered and debated by Riskinfo readers, with indications that – notwithstanding the LIF commission caps, minimum education requirements and the rising cost of delivering advice – a commercially-successful risk-focussed advice model may be almost within the reach of many; not just a few outlying advice business propositions.

For example, previous poll results suggest the vast majority in the adviser community believe an 80/20 hybrid commission model will sustain at least a viable risk-focussed advice business (see: …60/20 Not Enough), while almost six in ten advisers have previously indicated the’re open to the possibility of charging fees for at least some elements of the life insurance advice process (see: Fees and Risk Advice).

In considering the way ahead for risk advice through a positive lens, it appears the Quality of Advice Review reform measures, once implemented, may produce at least some savings in the drive to reduce the cost of delivering advice, while a more nuanced business structure in 2024 and beyond may allow more advisers build some elements of fee income into their default life insurance advice processes.

While an 80/20 commission cap arrangement appears to be off the table, at least for the time being, can you see that light at the end of the tunnel when it comes to commercially successful risk-focussed advice business propositions in the future?

Riskinfocus 24

The myriad of issues surrounding this poll question will be discussed in panel sessions during our Riskinfocus 24 CPD event series in March. Listen to what your own adviser peers have to say about this and other issues impacting the successful delivery of life insurance advice to Australian consumers, where we will look to contribute to advancing an outcome that will see more advisers delivering more life insurance advice to more Australians.

In the meantime, tell us what you think about this latest poll question and we’ll report back next week…


  1. If the industry returns to pre-LIF commissions, but retains responsibility periods etc. Would that see advisers return to writing Insurance?

    • I don’t believe so Matt. I’m of the strong belief that risk isn’t worth it anymore. It hurts to say that but I honestly believe it. Risk sustained me for 36 years, prior to my retirement in 2021, while I helped my precious clients with their risk protection strategies – all on commission. The absolute bare minimum to make a business ‘viable’ is 80/20. If we want risk focused businesses to thrive (or let’s just say ‘succeed’) then with current compliance and risks to the adviser through striped-down policies, 100/20 would be the fair amount of remuneration. Remember, many experienced advisers left in disgust at the litany of changes that were driven by politics, vested interests and life company expedience and greed. Those advisers sold up databases/client books and left. I won’t even start on the personal tragedy stories, some of the worst kind. THEN, after all that. The govt turns around and says you should have stayed because we are again moving the goal post and it will be easier for you. Thanks . . . for nothing.

      I’m speaking for myself of course and I base this on my experience and the feelings of many advisers with which I’ve spoken on the matter. Nobody I speak to thinks 60/20 is worth getting out of bed for, all things considered. The risks from the government – changing tack at every turn, the uncertainty, TWO YEAR responsibility periods(!) well, it isn’t the 1990s anymore. At least you knew back then what you could count on. That’s when the life companies paid more than lip service to ‘servicing’ and supporting advisers. They were the days when an adviser was proud to say they supported a certain life company because the life company supported them. There’s no support of a real nature now as evidenced by the complicit behaviour with govt when commissions were cut and claw-back increased. Simply reprehensible!

      Now, it is a moving feast and business plans can be undone in a moment at the whim of government with lower commissions, AMP-like situations with change in client base tenure, the list goes on. My God! Who’d want all that stress for a paltry 60/20? And fees? No, don’t talk to me about risk fees, the subject has been done to death and the answer is NO, you cannot sustainably charge fees for risk advice. See the MANY articles, studies and conventions done on THAT little chestnut. Will never happen in the wider risk adviser community in the current environment.

      The final nail in the coffin of the risk industry was the gutting of contractual definitions within risk policies, especially IP. The life companies and the re-insurers should be abjectly ashamed with what they conspired to do and are STILL doing along with unjustifiable premium increases. Gutted everything we held dear as an industry of helping people.

      There was no reduction in executive pay or bonuses when advisers took their commission hit to 60/20! Let’s note that little easily forgotten gem. The life companies were complicit in gutting the remuneration of advisers, thinking it would work better for themselves. Well, we know now they miscalculated on that one, don’t we!

      Sorry Matt but those are the facts of current risk life. Too sad for words what our once great industry has degenerated into.

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