{"id":54446,"date":"2021-03-02T16:29:22","date_gmt":"2021-03-02T06:29:22","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=54446"},"modified":"2021-03-04T08:37:24","modified_gmt":"2021-03-03T22:37:24","slug":"government-opposition-differ-on-risk-commissions","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2021\/03\/02\/government-opposition-differ-on-risk-commissions\/","title":{"rendered":"Government, Opposition Differ on Risk Commissions"},"content":{"rendered":"

A contrasting approach towards the validity of risk commissions appeared to be reinforced at this week’s AIA Australia Adviser Summit<\/a>.<\/p>\n

Day One of the three-day virtual event included opportunities for both the Government and the Labor Opposition to present their case on life industry and advice-related issues of the day and to engage with questions put to their representatives by advisers from around the country.<\/p>\n

Representing the Opposition’s perspective was Shadow Assistant Treasurer and Shadow Minister for Financial Services, Stephen Jones<\/strong>, who told the summit audience that he has always held the view that \u201c…conflicted remuneration is a problem.\u201d<\/p>\n

Jones’ statement this week is consistent with the position he outlined at the 2020 AFA Vision Conference, at which he noted “The provision of advice must be decoupled from the sales process which means the prohibition of commissions (however so described) from product manufacturers to advisers” (see: ALP Inclined to Ban Risk Commissions<\/a>).<\/p>\n

\"\"<\/a>
Stephen Jones… will listen but will not make any decisions ahead of the ASIC review…<\/figcaption><\/figure>\n

Jones added this week, however, that if risk advisers can make a case as to why his starting position is wrong \u201c..I will listen to it but I will not make a decision on any of those things ahead of the ASIC review.”<\/p>\n

As to what the alternatives may be, Jones pointed to legal and accountancy fees and said that within the advice sector a fee-for-service model will be increasingly a part of the business model for financial advice.<\/p>\n

Contrasting with the Opposition’s position, former financial adviser and Queensland Coalition MP, Bert van Manen<\/strong>, told the AIA Adviser Summit audience that he supports commission as a valid remuneration option for life insurance advice.<\/p>\n

\"\"<\/a>
Bert van Manen …the industry needs to stop focussing on the product side of the equation and focus on the strategic advice side…<\/figcaption><\/figure>\n

van Manen was asked whether he saw a future for risk commissions and if not, what sort of alternatives will keep advice accessible.<\/p>\n

He made it clear that he does not have a problem with commissions and thinks they are a perfectly valid form of remuneration, noting that a number of industries have a commission model and that insurance in particular should not be exempted from that.<\/p>\n

He added that, from his perspective, the issue is that the industry needs to focus on strategic advice, rather than on the product side of the equation:<\/p>\n

“If the strategic advice isn\u2019t correct for the client, the product may not do its job and may not be appropriate for the client\u2019s circumstances,” he said.<\/p>\n

van Manen also noted the example of the total removal of risk commission in the Netherlands, which he says demonstrates that if the life insurance area moved to fee-based structure, “…people are not going to pay that.”<\/p>\n

\u201cWe know already that there is a resistance to people paying fees for advice for insurance so we need to make sure there\u2019s a remuneration model in place so that advisers get paid for the very important work they do and commission is a key part of that,\u201d he said.<\/p>\n

\"\"<\/a>
MC, Andrew Klein, interviews Shadow Minister for Financial Services, Stephen Jones at this week’s AIA Adviser Summit 2021. Jones told the audience that in his view, conflicted remuneration remains a problem…<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"

A contrasting approach towards the validity of risk commissions appeared to be reinforced at this week’s AIA Australia Adviser Summit. Day One of the three-day virtual event included opportunities for both the Government and the Labor Opposition to present their case on life industry and advice-related issues of the day and to engage with questions […]<\/p>\n","protected":false},"author":24,"featured_media":54463,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,241],"tags":[],"class_list":["post-54446","post","type-post","status-publish","format-standard","has-post-thumbnail","category-compliance-regulation","category-conferences-and-events"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/54446","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\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=54446"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/54446\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/54463"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=54446"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=54446"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=54446"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}