{"id":35748,"date":"2017-01-17T18:49:30","date_gmt":"2017-01-17T07:49:30","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=35748"},"modified":"2017-01-18T07:35:30","modified_gmt":"2017-01-17T20:35:30","slug":"lif-loophole-poll","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2017\/01\/17\/lif-loophole-poll\/","title":{"rendered":"LIF Loophole Poll"},"content":{"rendered":"<div id=\"polls-176\" class=\"wp-polls\">\n\t\t<div class=\"pollHeader\"><strong>Would you engage in client rebates to avoid or minimise future commission clawbacks?<\/strong><\/div><div id=\"polls-176-ans\" class=\"wp-polls-ans\"><ul class=\"wp-polls-ul\">\n\t\t<li>No <small>(45%)<\/small><div class=\"pollbar\" style=\"width: 45%\" title=\"No (45% | 89 Votes)\"><\/div><\/li>\n\t\t<li>Yes <small>(32%)<\/small><div class=\"pollbar\" style=\"width: 32%\" title=\"Yes (32% | 64 Votes)\"><\/div><\/li>\n\t\t<li>Not sure <small>(23%)<\/small><div class=\"pollbar\" style=\"width: 23%\" title=\"Not sure (23% | 45 Votes)\"><\/div><\/li>\n\t\t<\/ul><div style=\"text-align: center\"><\/div><\/div>\n\t\t<input type=\"hidden\" id=\"poll_176_nonce\" name=\"wp-polls-nonce\" value=\"8cc91375f0\" \/>\n<\/div>\n\n<p>The contention this week that advisers will have the opportunity under the LIF legislation to avoid clawbacks forms the basis for your first poll of 2017.<\/p>\n<h6><!--more-->It appears possible the clawback provisions may be avoided by merely engaging in an ongoing program of \u2018rebates\u2019 to clients&#8230;<\/h6>\n<p><a href=\"http:\/\/imaclegal.com.au\/\" target=\"_blank\">Imac legal and compliance<\/a> Principal Lawyer, <strong>Ian McDermott<\/strong>, asserts that inconsistencies in the treatment of clawback under the proposed Life Insurance Framework regulations may allow advisers to circumvent the rules by rebating commissions to their clients to retain their policies (see: <a href=\"https:\/\/riskinfo.com.au\/news\/2017\/01\/16\/35733\/\" target=\"_blank\">Inconsistent LIF Regulations Create Loopholes<\/a>). He says, \u201cIt appears possible the clawback provisions may be avoided by merely engaging in an ongoing program of \u2018rebates\u2019 to clients, no matter how minimal the rebate so long as the rebate was applied in order to induce the client to acquire or continue to hold, the product.\u201d<\/p>\n<p>Where do you stand on this issue? Do you agree that this potential loophole exists, irrespective of whether you would adopt the strategy? Is rebating commissions to clients a valid action? It is a practice that has existed for decades.<\/p>\n<p>One remuneration model articulated to Riskinfo over time has been where the adviser applies a set fee to place a new life insurance policy &#8216;on the books&#8217;. An example is where the adviser told Riskinfo he charges his clients $2,500 as his standard fee for implementing a new policy, and any commission received in excess of that amount would always be rebated to the client.<\/p>\n<p>While more evolved practices have been developed in recent times on how to determine an appropriate fee for the provision of life insurance advice, does this necessarily make the practice of rebating commissions any less valid? Has it always been a reasonable practice? Has it ever been a reasonable practice?<\/p>\n<p>Tell us what is acceptable to you. Will it be ok, particularly once the LIF remuneration reforms are implemented, to continue to rebate a proportion of commission to clients if this forms part of your business model, in order to obviate the impact of clawbacks on your business?<\/p>\n<p>Tell us what you think and we&#8217;ll report back to you next week&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The contention this week that advisers will have the opportunity under the LIF legislation to avoid clawbacks forms the basis for your first poll of 2017.<\/p>\n","protected":false},"author":3,"featured_media":35787,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,49,270],"tags":[4247],"class_list":["post-35748","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\/35748","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=35748"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/35748\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/35787"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=35748"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=35748"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=35748"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}