{"id":10377,"date":"2011-05-11T11:06:55","date_gmt":"2011-05-11T01:06:55","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=10377"},"modified":"2021-04-15T10:16:18","modified_gmt":"2021-04-15T00:16:18","slug":"advisers-will-charge-fee-for-service-at-claim-time","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2011\/05\/11\/advisers-will-charge-fee-for-service-at-claim-time\/","title":{"rendered":"Advisers Will Charge Fee for Service at Claim Time"},"content":{"rendered":"

\"Vote<\/a><\/p>\n

Advisers can see no alternative other than to charge their clients a fee to help serve their\u00a0future superannuation insurance policy claims.<\/p>\n

90% of advisers appear to have reluctantly answered ‘yes’ to our question:<\/p>\n

<\/p>\n

Will you be forced to charge a fee to service your clients’ insurance claims for superannuation risk policies written after 1 July 2013?<\/em><\/strong><\/p>\n

Most adviser feedback has centred on the broader issues associated with the banning of risk commissions in super.\u00a0 For example, a number of\u00a0comments have been directed towards\u00a0the likelihood that\u00a0less life insurance business will be written, leading to more individuals and families being exposed to a bleak financial future if something should happen.<\/p>\n

Some advisers have considered new scenarios under which they may be remunerated for providing superannuation insurance advice, and therefore able to avoid charging a fee at claim time:<\/p>\n

… life companies instead of paying us the commission can rebate the normal commission to the client’s account and we charge a fee to the client’s account for the same amount or less if we charge a fixed fee. This way we still win and so will the client.<\/em><\/p>\n

Another adviser has suggested something similar, but at the same time observed the silliness of needing to do so in the first place:<\/p>\n

… I can charge a fee for service the equivalent of say 1% of funds invested deducted from the clients super and this is legal because its a fee, not a commission. Where is the point of difference. There is none.<\/em><\/p>\n

Another adviser has pointed out that under current rules, there has\u00a0existed a practice of charging less wealthy\u00a0clients a\u00a0much smaller fee\u00a0for their investment and superannuation advice because the adviser was able to be appropriately remunerated for their\u00a0services\u00a0by the commission included\u00a0in the superannuation insurance contract:<\/p>\n

I am sure that many financial advisers are able to provide discounted investment advice to low income earning clients because some of our costs are offset by the risk commissions received from these clients.<\/em><\/p>\n

The implication here is that the banning of commissions for insurance in super will remove this opportunity to to provide affordable advice to many low to middle income earners and will also make it difficult not to charge a fee at claim time.<\/p>\n

Broader issues were also the main focus for this adviser:<\/p>\n

Forget about claim time, we need to address the whole notion of a “servicing adviser” under these proposals. Who in their right mind would accept the professional risk and responsibility of putting their name against a policy as an adviser and receive nothing in return?<\/em><\/p>\n

From another:<\/p>\n

We already have an under insurance problem – having to charge a fee to review covers or process claims for insurance via superannuation funds is going to exacerbate this problem.<\/em><\/p>\n

The implications of banning commissions on insurance advice in superannuation are many and varied and we will monitor and report on developments.\u00a0 Take this opportunity to have your say on how this ban will impact your services at claim time or on any other aspect of your advice proposition…<\/p>\n

\"Vote<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Advisers can see no alternative other than to charge their clients a fee to help serve their\u00a0future superannuation insurance policy claims. 90% of advisers appear to have reluctantly answered ‘yes’ to our question:<\/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-10377","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\/10377","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=10377"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/10377\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=10377"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=10377"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=10377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}