{"id":14918,"date":"2012-03-27T21:43:09","date_gmt":"2012-03-27T11:43:09","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=14918"},"modified":"2012-03-28T11:31:57","modified_gmt":"2012-03-28T01:31:57","slug":"churning-debate-your-say","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2012\/03\/27\/churning-debate-your-say\/","title":{"rendered":"Churning Debate &#8211; Your Say"},"content":{"rendered":"<p style=\"text-align: center\"><a href=\"https:\/\/riskinfo.com.au\/polls\/churning-debate-your-say\" target=\"_self\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-1228                   aligncenter\" style=\"border: 0px\" src=\"https:\/\/riskinfo.com.au\/news\/files\/2009\/05\/vote-now.jpg\" alt=\"Vote Now!\" width=\"108\" height=\"47\" \/><\/a><\/p>\n<p>In response to the Financial Services Council&#8217;s major churning announcement last week, our latest poll provides you with an opportunity to have your say on the churning debate, as we ask:<\/p>\n<p><!--more--><\/p>\n<p><strong><em>Do you support the FSC&#8217;s latest policy proposal that advisers moving existing clients from one insurer to another within a five-year period will only be eligible for level commission?<\/em><\/strong><\/p>\n<p>The FSC&#8217;s new churning policy proposal, announced last week at its 2012 Life Insurance Conference, would implement\u00a0a five-year restriction on remuneration for replacement business, where only level commission will be available to the adviser from the insurer.<\/p>\n<p>riskinfo has confirmed that the FSC&#8217;s policy will\u00a0apply for all replacement business, including that where the adviser submitting the replacement proposal is not the same adviser who originally placed the business.<\/p>\n<p>This policy proposal is to be the subject of a three-month industry consultation process, during which the FSC will be seeking feedback from all stakeholders on this, as well as its two existing initiatives, announced in 2011, which propose:<\/p>\n<ul>\n<li>The removal of takeover terms for a policy or group of policies that are transferred by an adviser between insurers<\/li>\n<li>The establishment of a consistent adviser responsibility period across the industry of two years, with 100% commission clawback if the policy lapses with an insurer within one year, and 50% commission clawback if the policy lapses with an insurer during the second year<\/li>\n<\/ul>\n<p>We have already received substantial feedback\u00a0in response to the FSC&#8217;s policy announcement, most of which we have been able to publish, and most of which speaks against the proposal\u00a0(see: <a href=\"https:\/\/riskinfo.com.au\/news\/2012\/03\/22\/fsc-churning-announcement-5-year-upfront-commission-restriction\/\" target=\"_self\">FSC Churning Announcement&#8230;<\/a>).\u00a0 Major themes to date include calls to ban advisers who churn, but not to\u00a0financially penalise the vast majority of advisers who do not practice churning\u00a0(however, the FSC argues that other remuneration options would still exist for the adviser to supplement the level commission, such as fee for advice).\u00a0 Other arguments relate to the impact of the soon-to-be introduced Best Interests statute, which many advisers argue would dilute the need for the FSC&#8217;s restricted commission policy.\u00a0 Others argue that life insurance companies will be the only &#8216;winners&#8217;.<\/p>\n<p>But on the other hand, one adviser has commented:<\/p>\n<p><em>&#8220;&#8230; insurers are commercial businesses. When we change policies within the first 3 years (or so), it can&#8217;t be very profitable where upfront comms have been paid. I agree that it is not necessarily \u2018churning&#8217; but it is a problem that ought to be solved.&#8221;<\/em><\/p>\n<p>We \u00a0would welcome your\u00a0vote on this question and also\u00a0your\u00a0thoughts on this controversial subject&#8230;<\/p>\n<p style=\"text-align: center\"><a href=\"https:\/\/riskinfo.com.au\/polls\/churning-debate-your-say\" target=\"_self\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-1228                   aligncenter\" style=\"border: 0px\" src=\"https:\/\/riskinfo.com.au\/news\/files\/2009\/05\/vote-now.jpg\" alt=\"Vote Now!\" width=\"108\" height=\"47\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In response to the Financial Services Council&#8217;s major churning announcement last week, our latest poll provides you with an opportunity to have your say on the churning debate, as we ask:<\/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-14918","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\/14918","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=14918"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/14918\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=14918"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=14918"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=14918"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}