{"id":34855,"date":"2016-10-04T22:40:29","date_gmt":"2016-10-04T11:40:29","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=34855"},"modified":"2016-10-05T08:12:55","modified_gmt":"2016-10-04T21:12:55","slug":"noisy-lif-resistance-will-lead-to-nil-commissions","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2016\/10\/04\/noisy-lif-resistance-will-lead-to-nil-commissions\/","title":{"rendered":"‘Noisy’ LIF Resistance Will Lead to Nil Commissions"},"content":{"rendered":"

Financial advisers fighting to hold on to the current commission remuneration regime risk losing it all together along with any chance to clear up the poor practices of the past, according to the head of a financial services legal firm.<\/p>\n

\"Managing<\/a>
Managing Director, The Fold, Claire Wivell-Plater<\/figcaption><\/figure>\n

The Fold Managing Director, Claire Wivell Plater<\/strong> stated that changes to the way advisers are paid for providing life insurance advice are inevitable due to inappropriate advice practices in the past and because of a growing shift towards client determined remuneration models.<\/p>\n

Wivell Plater made the comments in a recent blog post in which she stated advisers resisting the change to commission remuneration may end up with nothing as commissions are reduced as a result of resistance to change.<\/p>\n

\u201cThe real risk to life advisers is not the change from upfront to level or hybrid commissions. The real threat is the complete abolition of commissions for life advice,\u201d Wivell Plater said.<\/p>\n

\u201cThe industry should see the opportunity to move to level and\/or hybrid commissions as an olive branch and a chance to assist to clean up the churning practices that have so bedevilled the industry in the past. It\u2019s the chance to “encourage” life risk advice practices that have a shot of universally being in clients’ best interests, without throwing the commission based remuneration baby out with the bath water,\u201d she added.<\/p>\n

\u201cThe real threat is the complete abolition of commissions for life advice…”<\/h6>\n

Wivell Plater said anyone who ignored the evidence of misconduct and inappropriate advice raised through industry inquiries, FOS determinations and ASIC reviews and pushed for a retention of the current system was \u2018living in a parallel universe\u2019.<\/p>\n

She was also critical of the efforts of advisers fighting the changes, to be introduced as part of the Life Insurance Framework legislation, describing it as \u201cnoise emanating from the vocal group of life advisers who seem to believe they can push back the tide on life commissions caps\u201d.<\/p>\n

Wivell Plater added to her criticism by stating that \u201c\u2026advisers whose business models depend on 100%-120% upfront commissions and 10-15% trail demonstrate short term thinking\u201d and stated a recurring income model based on a 30% ongoing commission would result in higher overall valuations.<\/p>\n

She rounded out her criticism by stating risk advisers did less to secure their commission payments than general insurance advisers who had to earn their payment each year.<\/p>\n

\u201cIt’s not as if life brokers have to do an awful lot to earn the ongoing commission. Stay in touch with the client, review their insurance needs periodically and only make a change when it’s really needed,\u201d Wivell Plater said.<\/p>\n

\u201cContrast this with general insurance brokers who, at best, earn 22-25% level commission and potentially have to completely re-market their non-automatically renewable policies year on year.\u201d<\/p>\n

Note to Advisers:<\/em><\/strong><\/p>\n

We welcome your comments and in the interest of fairness, request that you properly identify yourself either in your post ID or at the end of each comment.<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Financial advisers fighting to hold on to the current commission remuneration regime risk losing it all together along with any chance to clear up the poor practices of the past, according to the head of a financial services legal firm.<\/p>\n","protected":false},"author":3,"featured_media":34877,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,270],"tags":[4247],"class_list":["post-34855","post","type-post","status-publish","format-standard","has-post-thumbnail","category-compliance-regulation","category-remuneration","tag-feature"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/34855","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=34855"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/34855\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/34877"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=34855"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=34855"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=34855"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}