{"id":33883,"date":"2016-07-18T21:19:08","date_gmt":"2016-07-18T10:19:08","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=33883"},"modified":"2016-07-22T13:58:02","modified_gmt":"2016-07-22T02:58:02","slug":"restrict-commissions-or-target-churners","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2016\/07\/18\/restrict-commissions-or-target-churners\/","title":{"rendered":"Restrict Commissions or Target Churners?"},"content":{"rendered":"<div id=\"polls-165\" class=\"wp-polls\">\n\t\t<div class=\"pollHeader\"><strong>Which approach towards life insurance commissions better serves the long-term public interest?<\/strong><\/div><div id=\"polls-165-ans\" class=\"wp-polls-ans\"><ul class=\"wp-polls-ul\">\n\t\t<li>The New Zealand Government's <small>(87%)<\/small><div class=\"pollbar\" style=\"width: 87%\" title=\"The New Zealand Government's (87% | 269 Votes)\"><\/div><\/li>\n\t\t<li>The Australian Government's <small>(8%)<\/small><div class=\"pollbar\" style=\"width: 8%\" title=\"The Australian Government's (8% | 26 Votes)\"><\/div><\/li>\n\t\t<li>Neither <small>(3%)<\/small><div class=\"pollbar\" style=\"width: 3%\" title=\"Neither (3% | 8 Votes)\"><\/div><\/li>\n\t\t<li>Not sure <small>(2%)<\/small><div class=\"pollbar\" style=\"width: 2%\" title=\"Not sure (2% | 5 Votes)\"><\/div><\/li>\n\t\t<\/ul><div style=\"text-align: center\"><\/div><\/div>\n\t\t<input type=\"hidden\" id=\"poll_165_nonce\" name=\"wp-polls-nonce\" value=\"053a2f44c6\" \/>\n<\/div>\n\n<p>Our latest poll asks you to consider the differing approaches towards the future of life insurance commissions taken by governments of Australia and New Zealand.<\/p>\n<p><!--more-->Recent recommendations by the New Zealand Government have delivered a contrasting approach towards risk commissions within the context of serving the best interests of the community (see: <a href=\"https:\/\/riskinfo.com.au\/news\/2016\/07\/18\/risk-commissions-in-nz-to-stay\/\" target=\"_blank\">Risk Commissions in NZ to Stay<\/a>).<\/p>\n<p>The Australian Government&#8217;s approach could be described as more prescriptive compared with that taken across the Tasman.<\/p>\n<p>Distilling the respective positions to &#8216;sound bite&#8217; statements only serves to simplify a sometimes complex debate. But for the purpose of summarising the two approaches, we offer this:<\/p>\n<p><strong>Australian Government Approach<\/strong><\/p>\n<p>Remuneration by commission represents an inherent conflict of interest that does not serve the best interests of the consumer. The Australian Government is seeking to restrict (not ban) commissions in order to strike a balance between serving the long-term interests of the consumer and accommodating the difficult challenge faced by risk focused advisers in serving their clients while building a viable business. The proposed Life Insurance Framework reforms are intended to align the interests of all stakeholders: insurers, advisers and the consumer.<\/p>\n<p><strong>New Zealand Government Approach<\/strong><\/p>\n<p>Banning commissions (or by implication, restricting commissions) is not a &#8216;silver bullet&#8217; that will improve the quality of advice because:<\/p>\n<ul>\n<li>Commissions are not themselves harmful<\/li>\n<li>A ban on commissions would not directly target poor conduct<\/li>\n<li>It would not address conflicts of interest where financial products are sold through in-house distribution channels<\/li>\n<\/ul>\n<p>Another way of distinguishing between the two approaches could be to summarise the Australian Government&#8217;s approach as one that targets the means of conflicted interests while that of New Zealand targets instead those who abuse the privilege of being remunerated by commission (see: <a href=\"https:\/\/riskinfo.com.au\/news\/2016\/07\/05\/33740\/\" target=\"_blank\">New Zealand Regulator Claims Churn a Minor Problem<\/a>).<\/p>\n<p>Noting in closing that we&#8217;re asking you this question within the context of what is in the long-term interests of the consumer, we&#8217;ll hand the conversation over to you. As always, we welcome and value your comments that focus on the issues and advance the debate&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Our latest poll asks you to consider the differing approaches towards the future of life insurance commissions taken by governments of Australia and New Zealand.<\/p>\n","protected":false},"author":3,"featured_media":33906,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,49,270],"tags":[4247],"class_list":["post-33883","post","type-post","status-publish","format-standard","has-post-thumbnail","category-compliance-regulation","category-polls","category-remuneration","tag-feature"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/33883","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=33883"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/33883\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/33906"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=33883"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=33883"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=33883"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}