{"id":38416,"date":"2017-09-21T15:14:10","date_gmt":"2017-09-21T05:14:10","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=38416"},"modified":"2017-09-27T07:23:10","modified_gmt":"2017-09-26T21:23:10","slug":"advisers-still-uncertain-about-lif-changes","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2017\/09\/21\/advisers-still-uncertain-about-lif-changes\/","title":{"rendered":"Advisers Still Uncertain About LIF Changes"},"content":{"rendered":"

A majority of financial advisers still remain uncertain about key changes that will be introduced as part of the Life Insurance Framework (LIF) reforms, including start dates for commission caps and clawback arrangements and the extent of those arrangements, according to a new adviser survey.<\/p>\n

\"Zurich<\/a>
Zurich Life and Investments Chief Distribution Officer, Kristine Brooks<\/figcaption><\/figure>\n

The survey, commissioned by Zurich Financial Services Australia and conducted among 200 active risk writers by Lewers Research, found that around half of advisers were certain of the start date of the LIF remuneration changes, including when commission caps would commence.<\/p>\n

At the same time, 64.5 per cent were uncertain about the actual types of life insurance remuneration that were to be capped and 69 per cent were uncertain of the rules around grandfathering.<\/p>\n

The survey also found that only 43.5 per cent of advisers were certain they understood the new clawback arrangements. Where a strategy had been put in place to deal with clawback, 25 per cent of advisers had put in place a formal retention strategy, 26 per cent were planning to charge a client fee to cover any clawback amount, and 23.5 per cent were likely to use level commissions for larger cases.<\/p>\n

“…many advice practices still have a preference for up-fronts, and in this context we would have expected to see a greater understanding of the impending changes…”<\/h6>\n

The level of advisers who had modelled the impact of the LIF changes to their business cash flow was also below half with only 40 per cent indicating they had done so, however, only 18 per cent of advisers stated they would see more clients to offset any reduction in cash flow. Around one third of advisers indicated they would charge an advice fee to supplement commission payments, and 13.5 per cent stated they would increase existing fees charged alongside commissions.<\/p>\n

Zurich Life and Investments Chief Distribution Officer, Kristine Brooks<\/strong> the survey results were of concern with the start date for the LIF changes being less than four months away.<\/p>\n

\u201cThe industry has had a long time to prepare for these changes, and whilst they ultimately became law in February this year, the detail behind the changes has been known for much longer,\u201d Brooks said.<\/p>\n

\u201cIt could be that this lag, combined with a sense of fatigue around the whole debate, has seen LIF relegated from being a top of mind consideration,\u201d Brooks said, adding the capping of up-front commissions and doubling of renewal commissions would alter the cash flow of life insurance practices.<\/p>\n

\u201cAlthough we have seen a definite shift towards hybrid commissions arrangements since the LIF changes were legislated last year, many advice practices still have a preference for up-fronts, and in this context we would have expected to see a greater understanding of the impending changes,\u201d Brooks said.<\/p>\n","protected":false},"excerpt":{"rendered":"

A majority of financial advisers still remain uncertain about key changes that will be introduced as part of the Life Insurance Framework (LIF) reforms, including start dates for commission caps and clawback arrangements and the extent of those arrangements, according to a new adviser survey.<\/p>\n","protected":false},"author":3,"featured_media":38450,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,4474,270],"tags":[4247],"class_list":{"0":"post-38416","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-compliance-regulation","8":"category-practice-management","9":"category-remuneration","10":"tag-feature"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/38416","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=38416"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/38416\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/38450"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=38416"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=38416"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=38416"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}