{"id":63467,"date":"2022-11-14T08:17:19","date_gmt":"2022-11-13T22:17:19","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=63467"},"modified":"2025-03-14T12:02:25","modified_gmt":"2025-03-14T01:02:25","slug":"risk-commissions-clarification-on-informed-client-consent","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2022\/11\/14\/risk-commissions-clarification-on-informed-client-consent\/","title":{"rendered":"Risk Commissions &#8211; Clarification on Informed Client Consent"},"content":{"rendered":"<div class=\"header row\">\n<div class=\"intro\">\n<h3>The future of risk commissions and the nature of its disclosure continue to be of primary importance for many advisers, at a critical juncture during which its future &#8211; and therefore the future of many advice practises &#8211; will be determined&#8230;<\/h3>\n<\/div>\n<\/div>\n<p>The AFA\u2019s <strong>Phil Anderson<\/strong> issued a statement late last week that seeks to clarify elements of <strong>Michelle Levy\u2019s<\/strong> requirement for client consent as part of her Quality of Advice Review recommendation to retain risk commissions (see: <a href=\"https:\/\/riskinfo.com.au\/news\/2022\/11\/01\/retain-risk-commissions-qoa-review\/\" target=\"_blank\" rel=\"noopener\">Retain Risk Commissions&#8230;<\/a>).<\/p>\n<p>In seeking to allay some adviser concerns over what may constitute &#8216;client consent&#8217; for life insurance commissions, Anderson said the AFA had an opportunity to meet with Levy and the Treasury team last week, where he noted the following clarifications were made:<\/p>\n<ul>\n<li>The consent requirement would be a once off. This is not an annual requirement.<\/li>\n<li>Where consent has previously been obtained from the client, it would not be required again. Anderson cites an example where, if the upfront and ongoing commissions were previously disclosed in an SoA and the client signed the Authority to Proceed, then this is consent and nothing more would be required.<\/li>\n<li>Disclosure of ongoing commissions could be as simple as the commission rate and the dollar amount on the basis of the first year\u2019s premium. This is consistent with current practice, and not an additional obligation. There is no expectation of predicting commissions payable over multiple years.<\/li>\n<li>The adviser needs to keep evidence of client consent. There would be no requirement to provide this to the life insurer.<\/li>\n<\/ul>\n<figure id=\"attachment_63471\" aria-describedby=\"caption-attachment-63471\" style=\"width: 151px\" class=\"wp-caption alignright\"><a href=\"https:\/\/riskinfo.com.au\/news\/files\/2022\/11\/Phil-Anderson-v3-e1668475631508.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-63471\" src=\"https:\/\/riskinfo.com.au\/news\/files\/2022\/11\/Phil-Anderson-v3-e1668475631508-251x300.jpg\" alt=\"\" width=\"151\" height=\"180\" srcset=\"https:\/\/riskinfo.com.au\/news\/files\/2022\/11\/Phil-Anderson-v3-e1668475631508-251x300.jpg 251w, https:\/\/riskinfo.com.au\/news\/files\/2022\/11\/Phil-Anderson-v3-e1668475631508.jpg 266w\" sizes=\"auto, (max-width: 151px) 100vw, 151px\" \/><\/a><figcaption id=\"caption-attachment-63471\" class=\"wp-caption-text\">AFA CEO Phil Anderson &#8230;seeking to ease adviser concern over the proposed Quality of Advice Review requirement for client consent on risk commissions<\/figcaption><\/figure>\n<p>Anderson says in his statement the bottom line is that this intended consent requirement is nothing like annual renewal and client consent in the super\/investment space:<\/p>\n<p>\u201cClients providing informed consent is not unreasonable,\u201d says Anderson. \u201cThis already happens. In a future world where SoAs are not mandated, we will need to have other ways to ensure disclosure of commissions and confirm consent. That is not difficult to resolve, particularly where it is principles based, rather than prescriptive.\u201d<\/p>\n<p>Anderson added advisers should not fear this Quality of Advice Review proposal, advocating that the industry needs to \u201c\u2026continue to support the QAR for the work that they are doing to deliver fundamental change to the advice process and to reduce the cost and complexity of advice. Let\u2019s all get behind what they are doing.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The future of risk commissions and the nature of its disclosure continue to be of primary importance for many advisers, at a critical juncture during which its future &#8211; and therefore the future of many advice practises &#8211; will be determined&#8230; The AFA\u2019s Phil Anderson issued a statement late last week that seeks to clarify [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":63468,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[282,8,8291],"tags":[],"class_list":["post-63467","post","type-post","status-publish","format-standard","has-post-thumbnail","category-associations","category-compliance-regulation","category-story-of-the-week"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/63467","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=63467"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/63467\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/63468"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=63467"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=63467"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=63467"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}