{"id":3560,"date":"2009-10-27T19:39:31","date_gmt":"2009-10-27T09:39:31","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=3560"},"modified":"2010-01-09T11:33:55","modified_gmt":"2010-01-09T01:33:55","slug":"advisers-respond-to-issue-of-level-commissions-on-replacement-business","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2009\/10\/27\/advisers-respond-to-issue-of-level-commissions-on-replacement-business\/","title":{"rendered":"‘Don’t Penalise Us’ – Level Commissions on Replacement Policies"},"content":{"rendered":"

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

The majority of advisers want to retain the choice of commission options for replacement insurance business and want the life companies to do more to discourage ‘churning’.<\/p>\n

These are the key outcomes after advisers have had their say in response to our latest poll question:<\/p>\n

Should adviser remuneration on replacement life insurance business be restricted to level commission only?<\/em><\/strong><\/p>\n

At time of publishing, a healthy 70% of poll respondents said they are against the proposition of restricting replacement business to level commission only.<\/p>\n

A very common argument expressed\u00a0by poll respondents was,\u00a0why should the majority of advisers who effect replacement insurance business for all the right reasons be penalised because\u00a0of the actions of the few who\u00a0‘churn’ business?<\/p>\n

This argument then lead to the call from many advisers for the life companies to do more to stop churning.\u00a0 Typical comments:<\/p>\n

\u00a0“Why penalise Advisers who do the right thing by their clients, due to the actions of a few?”<\/em><\/p>\n

\u00a0“If the companies have a problem with churners they should deal with them directly (they know who they are) ~ but don’t penalise the innocent.”<\/em><\/p>\n

Another argument expressed by a number of advisers\u00a0relates to the time and effort involved in facilitating replacement business:<\/p>\n

“…the work required to replace a policy is just the same as if writing a new client and the level of commission does not cover our upfront costs in the first year.”<\/em><\/p>\n

A further\u00a0solution suggested by a few advisers was to\u00a0increase the responsibility periods for new business written on an\u00a0upfront or hybrid commission basis.<\/p>\n

However, 28% of poll respondents favour a restriction to level commission only.\u00a0 And while the ‘innocent’ may well be disadvantaged, some key\u00a0life\u00a0industry identities maintain\u00a0that restricting replacement business to level commission\u00a0is the best way to\u00a0significantly reduce\u00a0the\u00a0industry ‘churn’ rate.<\/p>\n

This issue is positioned within\u00a0the broader ongoing debate about\u00a0the nature of adviser remuneration.\u00a0 So, could we equally ask whether\u00a0adviser remuneration on replacement insurance business should be restricted only to fee for service?<\/p>\n

Perhaps the growing number of dealer groups who advocate adviser remuneration by fee for service may consider this option in future?<\/p>\n

Hundreds of advisers have taken the time to vote and\/or comment on this issue, and we are leaving our\u00a0 poll open for another week for those who have yet to make their voice heard.\u00a0 To have your say…<\/p>\n

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

The majority of advisers want to retain the choice of commission options for replacement insurance business and want the life companies to do more to discourage ‘churning’.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49,270],"tags":[],"class_list":["post-3560","post","type-post","status-publish","format-standard","category-polls","category-remuneration"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/3560","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=3560"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/3560\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=3560"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=3560"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=3560"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}