{"id":70597,"date":"2024-03-26T17:15:38","date_gmt":"2024-03-26T07:15:38","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=70597"},"modified":"2025-03-14T12:02:21","modified_gmt":"2025-03-14T01:02:21","slug":"1689-risky-advice-fee","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2024\/03\/26\/1689-risky-advice-fee\/","title":{"rendered":"$1,689 ‘Risky’ Advice Fee"},"content":{"rendered":"
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News that advisers delivering insurance-only advice charge their clients an average advice fee of $1,689 in addition to any commission income they receive, generated strong reader interest this week…<\/h3>\n<\/div>\n<\/div>\n

Advisers delivering insurance-only advice charge their clients an average advice fee of $1,689 in addition to any commission income they receive.<\/p>\n

This is one of the key findings stemming from Elixir Consulting’s<\/a> latest practice management research study, set for release shortly, but also shared with advisers by Elixir’s consulting team during this month’s Riskinfocus 24 Risk Advice CPD Tour<\/a> during a session entitled: Delivering profitable risk advice \u2013 pipe dream or possibility?<\/em><\/p>\n

…44% of those providing insurance-only advice now charge a fee<\/p><\/blockquote>\n

In its largest industry study yet, Elixir (which was acquired last year by services firm VBP<\/a>) consulted with 171 advisory firms representing 561 financial advisers and 43 risk specialists.<\/p>\n

It found 44% of those providing insurance-only advice now charge a fee in addition to any commissions attaching to the advice outcome. This number represents an increasing proportion of those charging fees for risk-only advice. 51% were found to still operate under a commission-only model, while the remaining 5% offer their clients a choice between fees and commissions.<\/p>\n

Of the 44% charging a combination of fees and commissions when risk-only advice is delivered, Elixir has revealed the average client fee amount in this group came to $1,689.<\/p>\n

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Source: Elixir Consulting Adviser Pricing Models Research Report 2024<\/figcaption><\/figure>\n

The Pricing Logic<\/span><\/p>\n

With a focus on how to deliver profitable life insurance advice to Australian consumers, Elixir Consulting’s Sue Viskovic<\/strong>, Graham Burnard<\/strong> and Lana Clark<\/strong> offered their adviser audiences around the country a context in which to position the logic attaching to charging a combination of both fees and commissions for risk-only advice, termed The Pricing Logic.<\/p>\n

Within this context, Elixir advocates that ‘Advice’ is an adviser’s intellectual property, which has inherent value for the client and which is powered by their knowledge and expertise and supported by the extensive capabilities of their business.<\/p>\n

Clients should pay for that advice, says Elixir, which it separates from the implementation work necessary to navigate what it refers to as the complexities of setting up the agreed insurance solutions. It says the cost of the implementation work is built into the product and paid by the life company in the form of a commission.<\/p>\n

Pro-Active Life Insurance Advice<\/span><\/p>\n

While the increasing trend in advisers applying a combination of fees and commissions for risk-only advice is generally being welcomed, Elixir also highlighted a cautionary finding which may also be considered as an opportunity.<\/p>\n

Of the 171 advice firms surveyed, just over one in four firms (26%) reported they only service the life insurance needs of their existing clients on a reactive basis – only when they ask for it.<\/p>\n

…more and more firms are reluctant to write risk<\/p><\/blockquote>\n

One of the trends that became clear in the research, according to Elixir’s Graham Burnard<\/strong> – which he says is also backed up by first hand conversations with advice firms – is that more and more firms are reluctant to write risk.<\/p>\n

While acknowledging that risk advice is often complex and can sometimes lead to errors in product selection, Burnard says these errors can often occur in firms which don’t deliver much risk advice. His message to those advisers and advice firms is to either do it properly or outsource it, while those advice firms ‘stuck in the middle’ of writing a little or a lot of risk business need to find a way to address the challenges presented by delivering reactive, as opposed to proactive risk advice.<\/p>\n

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Source: Elixir Consulting Adviser Pricing Models Research Report 2024<\/figcaption><\/figure>\n

Riskinfo will report other key findings stemming from Elixir Consulting’s most recent practice management survey and also acknowledges and thanks Sue Viskovic (Perth), Graham Burnard (Adelaide, Hobart, Melbourne, Sydney) and Lana Clark (Brisbane) for the quality of their presentations at the Riskinfocus 24 Risk Advice CPD event series and the value that was delivered.<\/p>\n

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Elixir Consulting’s Graham Burnard shares with the Riskinfocus 24 Sydney audience last week some of the key findings from the firm’s latest practice management survey…<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"

News that advisers delivering insurance-only advice charge their clients an average advice fee of $1,689 in addition to any commission income they receive, generated strong reader interest this week… Advisers delivering insurance-only advice charge their clients an average advice fee of $1,689 in addition to any commission income they receive. This is one of the […]<\/p>\n","protected":false},"author":3,"featured_media":70658,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,270,8291],"tags":[],"class_list":["post-70597","post","type-post","status-publish","format-standard","has-post-thumbnail","category-compliance-regulation","category-remuneration","category-story-of-the-week"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/70597","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=70597"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/70597\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/70658"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=70597"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=70597"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=70597"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}