Most advisers believe\u00a0that the\u00a0Best Interest\u00a0statute to be introduced with Future of Financial Advice reforms\u00a0will have little to no impact on the practice of churning.<\/p>\n
Responding to our poll which asked:<\/p>\n
Will the introduction of \u2018Client Best Interest’ legislation have a significant impact on reducing churning?<\/em><\/strong><\/p>\n 75% of poll respondents dismissed this notion.\u00a0 16% of advisers do believe\u00a0Best Interest\u00a0will have an impact on churning, while 9% are undecided.<\/p>\n A number of comments we have received from advisers suggest\u00a0the answer to reducing churning lies with\u00a0the life companies:<\/p>\n “… if the insurers can get enough momentum going to ‘stop churning’ or have it seen as [an] anti-client element, which it isn’t in the bulk of the situations, then they have a base on which to push reforms.”<\/em><\/p>\n “The insurer is responsible for the whole matter of churning.”<\/em><\/p>\n “… the answer to reducing churning lies very much with the insurers choosing not to accept applications … from the small number of advisers identified as operating in that manner. That in turn would then help the majority of advisers to continue doing what is best for their clients without being [labelled] as churners.”<\/em><\/p>\n One adviser raised the issue of how advisers should be paid for replacement business:<\/p>\n “Churning” will only cease when, and if, all commissions are paid on a level basis.”<\/em><\/p>\n Other comments from advisers defend the practice of facilitating replacement business because in the vast majority of cases it is indeed\u00a0in the best interest of the client to do so.\u00a0 We support this point of view and have raised the question of churning\u00a0only in relation to those replacement policies\u00a0where the upgrade is not justifiable or in the client’s best interests.<\/p>\n We will return to the issue of churning in future articles and polls.<\/p>\n","protected":false},"excerpt":{"rendered":" Most advisers believe\u00a0that the\u00a0Best Interest\u00a0statute to be introduced with Future of Financial Advice reforms\u00a0will have little to no impact on the practice of churning.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,49,270],"tags":[],"class_list":["post-10289","post","type-post","status-publish","format-standard","category-compliance-regulation","category-polls","category-remuneration"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/10289","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=10289"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/10289\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=10289"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=10289"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=10289"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}