There has been a\u00a0strong reaction\u00a0from many\u00a0established advisers in response to our story last week\u00a0about a planning group stamping out risk commissions.<\/p>\n
Following our story about the move by Hewison & Associates<\/a> to a fee for service model for all client advice (see Planning Group to Stamp Out Risk Commissions<\/a>), riskinfo received numerous responses seeking to offer a balance to the position taken by Hewisons (who mainly serve high net wealth clients).<\/p>\n Amongst other comments, advisers have questioned\u00a0Hewison & Associates CEO, John Hewison’s<\/strong> contention that commissions drive up the cost of insurance:<\/p>\n “I have seen far more examples of premiums being reduced due to better underwriting and claims management by insurance companies and improvements in medical science all under the “evil” practice of insurance companies paying commission to advisors.”<\/em><\/p>\n “Pretty ill-informed, considering premium rates have reduced consistently over the past 15 years….”<\/em><\/p>\n Other advisers and advice practices have supported the position taken by Hewisons.\u00a0 One adviser told riskinfo their practice has operated under a ‘full’ fee for service model for the last six years.\u00a0 But what concerned him most “… is that we continue to let product manufacturers drive the agenda and timing of change, rather that the advice industry showing leadership, vision and innovation to charge for the value of our services.”<\/p>\n riskinfo appreciates Mr Hewison’s further comments regarding his initiative:<\/p>\n “I have been a strong opponent of commission based payments in the financial planning industry for over twenty years.\u00a0 Coming from a corporate management background, I contend that this is a matter of principle and good business practice as far as I and my colleagues are concerned.”<\/p>\n Mr Hewison added, “We take the view that pricing is matter of reasonable cost to the consumer at a reasonable profit to the adviser. Risk advice is an adjunct to the broader financial advice that we provide our clients, not the mainstream of our business, so our pricing proposition is going to be different to those businesses that only specialise in risk; nevertheless the principle is the same.”<\/p>\n While there is sometimes strong emotion that accompanies the\u00a0issue of whether or not risk advice should be paid via commissions or fees, there is also a balanced debate that can be achieved.<\/p>\n For example, one of the country’s premier risk insurance advisers has told riskinfo he is\u00a0finalising a fee model for his own high net worth clients, and is therefore not against the principle of a fee for service model for risk.<\/p>\n Perhaps the debate\u00a0should focus on when fee for service for risk advice may be appropriate, eg while it could\u00a0be one option for high net worth clients, is it a realistic solution for ‘mums and dads’?<\/p>\n We have opened our comments box on this story if you would like\u00a0to add your own thoughts to this debate…<\/p>\n","protected":false},"excerpt":{"rendered":" There has been a\u00a0strong reaction\u00a0from many\u00a0established advisers in response to our story last week\u00a0about a planning group stamping out risk commissions.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[270],"tags":[],"class_list":{"0":"post-5778","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-remuneration"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/5778","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=5778"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/5778\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=5778"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=5778"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=5778"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}… we continue to let product manufacturers drive the agenda and timing of change<\/h6>\n
We take the view that pricing is matter of reasonable cost to the consumer at a reasonable profit to the adviser<\/h6>\n