- Agree (78%)
- Disagree (18%)
- Not sure (4%)
Our latest poll is based on findings, hot off the press, which reveal a growing cohort of advisers charge their clients a fee when delivering stand-alone life insurance advice.
As we report elsewhere (see: $1,689 ‘Risky’ Advice Fee), 44% of advisers participating in Elixir Consulting’s nation-wide practice management survey now levy a fee on top of their commission income when providing risk-only advice.
There appeared to be a general acceptance of this finding when it was shared with advisers attending our Riskinfocus 24 events held in recent weeks, but comments and feedback provided during other sessions at Riskinfocus 24 confirm other individual risk-focussed advisers as well as risk-focussed licensee firms prefer to maintain their commission-only revenue model.
The need to supplement existing life insurance commissions mandated under the Life Insurance Framework reforms is driven in part by the nature of the adviser and the advice business. Established advisers and advice businesses have been able to settle into the current 60/20 hybrid commission mandate due to the strength and size of their renewal income portfolio.
…many are not in as strong a financial position
Of the declining number of advisers who remain in the sector, however, many are not in as strong a financial position, such as newer industry entrants as well as more established businesses which continue to struggle with profitability as a result of the significant increase to the cost of delivering advice due to reforms introduced following the fallout from the Global Financial Crisis.
Where do you stand on this issue? Do you think the life insurance advice sector has evolved – especially over the last five-to-ten years – to the extent that it’s now acceptable in the eyes of your peers to supplement commission income with a client fee when delivering risk-only advice?
Even for the 51% of risk specialists who still rely on commission income only, do you object to others who elect to, or are being forced to charge, a fee to supplement their risk-only advice business model?
Tell us what you think and we’ll report back next week…
Well said Jeremy. Speaking inconvenient truth to the simple academics and ‘consultants’. Again, we see, client-facing research and experience in the field over decades means little to these people. They ignore well established findngs from scores of experienced specialist risk advisers as they attempt to stay relevant with sketchy wording in hastily thrown together narrative-friendly “surveys”.
There is an element of, “do not let the truth get in the way of a good story” and let us vote on “what we want,” rather than what the wider market will actually accept and pay in this carefully scripted Elixir story, that is aiming to sell their version of the golden elixir, or as a Dictionary will explain it as, “Any medicine claimed as a cure all.”
There is a big difference between what Advisers feel they deserve and want, by charging an Advice fee and the real world of getting all clients to willingly pay it.
No-one who runs a Risk Advice business will argue of the merits of charging a fee.
The real world where Advisers live, is very different to a vision.
There is nothing wrong with trying to charge clients a fee and if the relationship won’t be negatively impacted, then do what thousands of very experienced Advice practitioners did over many years with no success and see how you go.
Australia has become a Country where experience counts for little, as what would older people know who have vast life experiences and knowledge.
It is much wiser to ignore that and pay thousands of dollars to theory-based consultancy firms and of course, our learned Universities with their vast practical knowledge.
Comments are closed.