{"id":60314,"date":"2022-04-05T15:05:34","date_gmt":"2022-04-05T04:05:34","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=60314"},"modified":"2025-03-14T12:02:27","modified_gmt":"2025-03-14T01:02:27","slug":"leave-commissions-alone-clearview","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2022\/04\/05\/leave-commissions-alone-clearview\/","title":{"rendered":"Leave Commissions Alone \u2013 ClearView"},"content":{"rendered":"<div class=\"header row\">\n<div class=\"intro\">\n<h3>Not surprisingly, ClearView&#8217;s call for no further changes to commissions is the Riskinfo Story of the Week. Debate continues, however, as to whether &#8211; on the assumption risk commissions get a reprieve following the 2022 Quality of Advice Review &#8211; a 60\/20 commission model will sustain a risk specialist advice business&#8230;<\/h3>\n<\/div>\n<\/div>\n<p>No further changes to risk commissions, slashing advice paperwork and measures to support stable, sustainable IP solutions should be top of the financial services industry\u2019s reform agenda as it prepares for a landmark regulatory review, according to ClearView Wealth.<\/p>\n<p>In releasing the group\u2019s 2022 top three priorities for industry reform, the company reiterated its support for the life insurance commission model.<\/p>\n<p>The Reform Agenda paper states that ClearView believes current life insurance commission rates in Australia are appropriate, capped at 60 percent upfront and 20 percent ongoing.<\/p>\n<figure id=\"attachment_56413\" aria-describedby=\"caption-attachment-56413\" style=\"width: 132px\" class=\"wp-caption alignright\"><a href=\"https:\/\/riskinfo.com.au\/news\/files\/2021\/06\/simon-swanson-1.jpeg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-56413\" src=\"https:\/\/riskinfo.com.au\/news\/files\/2021\/06\/simon-swanson-1.jpeg\" alt=\"\" width=\"132\" height=\"180\" \/><\/a><figcaption id=\"caption-attachment-56413\" class=\"wp-caption-text\">Simon Swanson&#8230;It&#8217;s important that our regulatory system is fit for purpose and does not add unnecessary complexity&#8230;<\/figcaption><\/figure>\n<p>\u201cFurther changes are unnecessary and would have a detrimental impact on consumers, society and the life insurance industry\u2026\u201d<\/p>\n<p>ClearView states that the commission model is \u201c\u2026globally-accepted, economically rational and reflects how consumers prefer to pay for life insurance advice.\u201d<\/p>\n<p>The company says it enables product manufacturers to cover the full or partial cost of life insurance advice. \u201cWithout this subsidy, the majority of Australians would not be able to get adequate protection.\u201d<\/p>\n<p>The report adds that the potential unintended consequences of reducing or banning life insurance commissions include:<\/p>\n<ul>\n<li>Fewer people seeking professional advice and getting adequate cover<\/li>\n<li>Fewer advisers providing life insurance advice and those who do focusing on wealthier clients<\/li>\n<li>The financial cost of caring for the sick and injured falling back on families, society and the government<\/li>\n<\/ul>\n<p>It notes that at claim time, life insurance provides funds to cover living expenses, medical bills and other costs, and enable households to focus on recovery.<\/p>\n<blockquote><p>&#8230;it\u2019s crucial that regulatory settings facilitated easy access to financial advice and protection for consumers&#8230;<\/p><\/blockquote>\n<p>In a statement releasing ClearView\u2019s top three priorities for industry reform Managing Director <strong>Simon Swanson<\/strong> says it\u2019s crucial that regulatory settings facilitated easy access to financial advice and protection for consumers, citing recent local and global events as adding further pressures on household budgets.<\/p>\n<p>\u201cThe devastating impact of Covid-19 and a spate of natural disasters, including the recent floods in NSW and Queensland, have heightened awareness of the importance and value of professional advice,\u201d he says.<\/p>\n<p>\u201cHowever, this trend is occurring at a time when the cost of operating an advice business is significantly increasing and, in turn, pushing advice fees higher. It is important that our regulatory system is fit for purpose and does not add unnecessary complexity.\u201d<\/p>\n<p>ClearView is also calling for a slimmed down Record of Advice to replace the Statement of Advice in situations where simple advice is being delivered, as well as the removal of the Safe Harbour steps, in line with the recommendation of the Financial Services Royal Commission.<\/p>\n<p>The group\u2019s reform agenda citied research that showed the cost of a SoA had risen more than 30 percent in the past four years.<\/p>\n<p><strong>Deferring Five-Year Contract Term for IP<\/strong><\/p>\n<p>The insurer also welcomed APRA\u2019s recent decision to defer five-year contract terms for income protection (IP) products for at least another two years.<\/p>\n<p>\u201cIt is crucial for life insurance solutions, including IP insurance, to be stable, sustainable and simpler for consumers,\u201d Swanson says.<\/p>\n<p>\u201cClearView welcomes the revised approach and we support APRA\u2019s ongoing sustainability work. We recognise the importance of engaging with Treasury on issues about product rationalisation and quality of advice, and strongly advocate for engagement with financial adviser bodies, licensees and advisers.\u201d<\/p>\n<p>ClearView adds that it is &#8220;&#8230;committed to being a passionate advocate for public policy that underpins a strong, vibrant financial services industry&#8221; and will participate in the Quality of Advice Review, which submits its final report to government in December.<\/p>\n<p>Click here to view <a href=\"https:\/\/riskinfo.com.au\/news\/files\/2022\/04\/CVM_1197_Advocacy_Agenda_2022_V10.pdf\" target=\"_blank\" rel=\"noopener\">ClearView&#8217;s Reform Agenda 2022.<\/a><\/p>\n<p><a href=\"https:\/\/riskinfo.com.au\/news\/files\/2022\/04\/CVM_1197_Advocacy_Agenda_2022_V10.pdf\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-60324\" src=\"https:\/\/riskinfo.com.au\/news\/files\/2022\/04\/clearview.png\" alt=\"\" width=\"450\" height=\"599\" srcset=\"https:\/\/riskinfo.com.au\/news\/files\/2022\/04\/clearview.png 450w, https:\/\/riskinfo.com.au\/news\/files\/2022\/04\/clearview-225x300.png 225w, https:\/\/riskinfo.com.au\/news\/files\/2022\/04\/clearview-316x420.png 316w\" sizes=\"auto, (max-width: 450px) 100vw, 450px\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Not surprisingly, ClearView&#8217;s call for no further changes to commissions is the Riskinfo Story of the Week. Debate continues, however, as to whether &#8211; on the assumption risk commissions get a reprieve following the 2022 Quality of Advice Review &#8211; a 60\/20 commission model will sustain a risk specialist advice business&#8230; No further changes to [&hellip;]<\/p>\n","protected":false},"author":24,"featured_media":60319,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,8,270,8291],"tags":[],"class_list":["post-60314","post","type-post","status-publish","format-standard","has-post-thumbnail","category-company-news","category-compliance-regulation","category-remuneration","category-story-of-the-week"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/60314","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=60314"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/60314\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/60319"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=60314"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=60314"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=60314"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}