{"id":79640,"date":"2025-10-13T09:46:32","date_gmt":"2025-10-12T22:46:32","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=79640"},"modified":"2025-11-11T13:57:17","modified_gmt":"2025-11-11T02:57:17","slug":"60-20-regime-risk-advice-fees-in-the-spotlight","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2025\/10\/13\/60-20-regime-risk-advice-fees-in-the-spotlight\/","title":{"rendered":"60\/20 Regime, Risk Advice Fees in the Spotlight"},"content":{"rendered":"
\n
\n

The hot topic of the fairness and adequacy of 60\/20 risk commission caps and the emerging \u2018normalisation\u2019 of fees for risk advice \u2013 both dissected at the recent AIA Round Table \u2013 drew much reader interest this week\u2026<\/h3>\n<\/div>\n<\/div>\n

The life insurance industry\u2019s 60\/20 commission model was a topic of debate during the recent AIA Australia Round Table, with industry leaders indicating it doesn’t reflect the true cost of delivering advice \u2013 especially for clients on low-middle incomes.<\/p>\n

Pina Sciarrone<\/strong>, AIA Australia’s Chief Retail Insurance and Advice Officer, said an adviser would receive $2,400 (60%) in the first year for a $4,000 premium.<\/p>\n

\u201cI think it’s under in that first year when you look at the unit cost to deliver advice,\u201d she said.<\/p>\n

Figures quoted during the discussion revealed fees of around $3,400 were typical for life insurance advice.<\/p>\n

Ben Martin<\/strong>, AIA\u2019s National Manager, Technical Advice and Strategic Partnerships, shared with the Round Table panel his view that the clarification of the tax deductibility of upfront advice fees, as indicated by the ATO last year, was a positive sign (see: ‘Significant Portion\u2019 of Advice Fees Could Be Tax Deductible<\/a>).<\/p>\n

\u201cIt obviously improves the economics, particularly for those of us advising clients where the year one premium is around that $4,000 to $5,000 middle margin, or even lower,\u201d he said.<\/p>\n

Martin also said another rationale which may support more advisers charging upfront fees for life insurance advice is that clients will generally have a higher engagement in the advice process and outcome.<\/p>\n

“Advisers sometimes spend time with the client only for that business not to actually complete,” he said.<\/p>\n