{"id":64419,"date":"2023-02-08T12:16:51","date_gmt":"2023-02-08T01:16:51","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=64419"},"modified":"2025-03-14T12:02:24","modified_gmt":"2025-03-14T01:02:24","slug":"60-20-commission-caps-recommendation-confirmed","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2023\/02\/08\/60-20-commission-caps-recommendation-confirmed\/","title":{"rendered":"60\/20 Commission Caps Recommendation Confirmed"},"content":{"rendered":"
\n
\n

The release of the Quality of Advice Review report earlier this week, which finally confirmed the recommendation to retain current commission caps and clawback requirements, is the ‘no-contest’ Riskinfo Story of the Week…<\/h3>\n<\/div>\n<\/div>\n

The final Quality of Advice Review<\/a> report, released by the Government today, explicitly recommends that the current 60\/20 risk commission caps be retained.<\/p>\n

In an earlier issues paper on conflicted remuneration, which was released on October 31 last year, Review leader, Michelle Levy<\/strong>, had proposed retaining risk commissions, but did not explicitly recommend the level at which they should be retained (see: Retain Risk Commissions…<\/a>).<\/p>\n

\"\"<\/a>
Assistant Treasurer and Financial Services Minister, Stephen Jones …seeking to consult widely on the QoA Review final recommendations<\/figcaption><\/figure>\n

Levy\u2019s recommendation in the full report confirms that the exception to the ban on conflicted remuneration for benefits given in connection with the issue or sale of a life risk insurance product should be retained at the 60\/20 current level.<\/p>\n

The final report states “…commission and clawback rates should be maintained at the current levels (60 percent upfront commissions and 20 percent trailing commissions, with a two-year clawback).”<\/p>\n

The retention of current commission arrangements, if eventually accepted by the Minister, will be greeted with disappointment by some consumer groups, but will be welcomed by many within the financial services sector and the broader community.<\/p>\n

There will also be a significant number of financial advisers and financial advice businesses which will view this outcome as a pyrrhic victory due to what they believe to be an unsustainable and unviable commercial restraint on their ability to earn an appropriate income in this current regulatory environment (see: Retaining Risk Commissions and Pyrrhic Victories<\/a>).<\/p>\n

Client consent<\/strong><\/p>\n

As stated in the earlier conflicted remuneration summary release, the commission recommendation reiterates that a person who provides personal advice to retail clients in relation to life risk insurance products, and who receives a commission in connection with the issue or sale of the life risk insurance product “…must obtain the client’s informed consent before accepting a commission.”<\/p>\n

This element was clarified today, however, with confirmation that consent will be required only on a one-off basis and will apply for the duration of the policy.<\/p>\n

\"\"<\/a>
Recommendation 13.7 from the final report of the Quality of Advice Review, December 2022.<\/figcaption><\/figure>\n
\"\"<\/a>
Michelle Levy.<\/figcaption><\/figure>\n

Minister for Financial Services, Stephen Jones<\/strong>, says the government will now consult widely on the Review\u2019s recommendations.<\/p>\n

In thanking Levy for her work in leading the review Jones says she\u2019s \u201c\u2026toiled hard and her report is already provoking valuable discussions within the government.\u201d<\/p>\n

\u201cBy releasing her report today, we want the public and industry to be part of those discussions too.\u201d<\/p>\n

The statement noted that anyone with an interest in financial advice \u201c\u2026should read it and make their views known.\u201d<\/p>\n

Click here<\/a>\u00a0to access and review the full report.<\/p>\n","protected":false},"excerpt":{"rendered":"

The release of the Quality of Advice Review report earlier this week, which finally confirmed the recommendation to retain current commission caps and clawback requirements, is the ‘no-contest’ Riskinfo Story of the Week… The final Quality of Advice Review report, released by the Government today, explicitly recommends that the current 60\/20 risk commission caps be […]<\/p>\n","protected":false},"author":24,"featured_media":64443,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,8282,8291],"tags":[],"class_list":{"0":"post-64419","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-compliance-regulation","8":"category-government","9":"category-story-of-the-week"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/64419","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=64419"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/64419\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/64443"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=64419"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=64419"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=64419"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}