{"id":75087,"date":"2024-12-10T10:24:40","date_gmt":"2024-12-10T00:24:40","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=75087"},"modified":"2025-03-14T12:02:18","modified_gmt":"2025-03-14T01:02:18","slug":"coalition-confirms-risk-commissions-on-agenda","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2024\/12\/10\/coalition-confirms-risk-commissions-on-agenda\/","title":{"rendered":"Coalition Confirms Risk Commissions on Agenda"},"content":{"rendered":"
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Our report that the Shadow Minister for Financial Services has confirmed a future Coalition Government would actively review the current 60\/20 commission caps attracted strong reader interest this week…<\/h3>\n<\/div>\n<\/div>\n

Shadow Assistant Treasurer and Shadow Minister for Financial Services, Luke Howarth<\/strong>, has confirmed a Coalition Government would actively review the current 60\/20 commission caps mandated under the Life Insurance Framework reforms.<\/p>\n

The Shadow Minister re-affirmed his position to Riskinfo last week, following his last-minute inability to address advisers at the 2024 FAAA Congress the previous week.<\/p>\n

In responding to a question put to him around comments made by Financial Services Minister, Stephen Jones<\/strong>, at the 2023 FAAA Congress in Adelaide, at which the Minister said a review of the LIF commission caps wasn’t even in his ‘in-tray’, Shadow Minister Howarth was much more forthcoming.<\/p>\n

\"\"<\/a>
Shadow Financial Services Minister, Luke Howarth …a Coalition Government would review the current LIF commission caps.<\/figcaption><\/figure>\n

While far from definitive in his language, the Shadow Minister nonetheless notes in the statement provided to Riskinfo that it’s time to look at the Life Insurance Framework commission caps:<\/p>\n

“Clearly the 60% upfront commission cap has made it unviable for advisers to sell life insurance to some people,” says Shadow Minister Howarth, adding that feedback provided to him is that the current 60% upfront commission cap means it often isn\u2019t worth doing the work involved:<\/p>\n

“We have a situation where many Australians are now underinsured, can\u2019t get advice on their life insurance and the only clients worthwhile are wealthier and older,” says Howarth, who makes the point that younger people people starting a family also need access to advice on their insurance.<\/p>\n

Future premium increases?<\/strong><\/p>\n

…the current 20% cap on ongoing commissions is probably about right<\/p><\/blockquote>\n

Interestingly, the Shadow Minister observes the current 20% cap on ongoing commissions “…is probably about right,” which indicates a future Coalition Government review of the LIF commission caps would more likely centre on the upfront commission element.<\/p>\n

This may be an important consideration which addresses concerns raised by Quality of Advice Review architect, Michelle Levy<\/strong>, who has previously expressed concerns that any increase to upfront commission caps would place upward pressure on life insurance premiums, and would therefore be detrimental to the consumer.<\/p>\n

Following discussions with insurers, however, Riskinfo understands that from a pricing perspective, life companies are much better positioned to accommodate an increase in upfront commission caps (a one-off additional cost) than they would if the 20% ongoing commission cap level was increased.<\/p>\n

DBFO Tranche 2<\/strong><\/p>\n

The Shadow Minister also took aim at the recent release from the Government outlining the nature of the reforms which will be included in Tranche 2 of the legislation that will implement the Delivering Better Financial Outcomes reform package recommended in the final report of Levy’s Quality of Advice review (see: New Class of Adviser Confirmed<\/a>):<\/p>\n

\u201cAfter 720 days of waiting, we now have a third government response to the Levy Review but still no draft legislation,” says Howarth, adding “The Albanese Government promised draft legislation before Christmas but has instead provided another placeholder announcement lacking in detail.”<\/p>\n

Shadow Minister Howarth confirmed the Coalition will examine the detail of the DBFO Tranche 2 legislation when it is available and work constructively to progress any sensible proposals, but that it is important these reforms rebuild the advice industry and serve consumers.<\/p>\n","protected":false},"excerpt":{"rendered":"

Our report that the Shadow Minister for Financial Services has confirmed a future Coalition Government would actively review the current 60\/20 commission caps attracted strong reader interest this week… Shadow Assistant Treasurer and Shadow Minister for Financial Services, Luke Howarth, has confirmed a Coalition Government would actively review the current 60\/20 commission caps mandated under […]<\/p>\n","protected":false},"author":3,"featured_media":75096,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,270,8291],"tags":[],"class_list":{"0":"post-75087","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-compliance-regulation","8":"category-remuneration","9":"category-story-of-the-week"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/75087","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=75087"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/75087\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/75096"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=75087"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=75087"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=75087"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}