Our latest poll returns to the ongoing issue of what constitutes adequate and appropriate remuneration for life insurance advice.
This persistent question was addressed as part of the AIA Australia – Advice at the Crossroads Round Table, during which various perspectives were raised in relation to the current LIF commission caps and the seemingly growing popularity (or at least acceptance) of charging fees for risk advice – hence our poll question.
One of the more significant changes emerging in the last 12 months, as pointed out by AIA’s Ben Martin during the Round Table discussion, relates to the clarification of the tax deductibility of upfront advice fees, as indicated by the ATO last year, thereby opening the door to a heightened opportunity for advisers to charge fees for upfront life insurance advice in certain tax advice-related circumstances (see: ‘Significant Portion’ of Advice Fees Could Be Tax Deductible).
Risk advice business models also continue to evolve over time where – at least anecdotally – risk-focussed advisers who have historically been averse to charging fees for any aspect of the advice process appear to be softening, motivated at least in part by their endeavour to build sustainable and robust business models to underpin their risk advice propositions.
Are you still holding out for the law-makers to relent…?
Has your own thinking on this issue changed over the last year or so? Are you still holding out for the law-makers to relent and offer more commercially-attractive commission caps, or are you making changes that are within your control to develop a more commercially-sustainable life insurance advice proposition?
Tell us what you think and we’ll continue the conversation next week…
