{"id":8127,"date":"2010-10-19T22:43:27","date_gmt":"2010-10-19T11:43:27","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=8127"},"modified":"2020-02-06T08:12:23","modified_gmt":"2020-02-05T21:12:23","slug":"the-case-for-standardising-risk-commissions","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2010\/10\/19\/the-case-for-standardising-risk-commissions\/","title":{"rendered":"The Case For Standardising Risk Commissions"},"content":{"rendered":"<p style=\"text-align: center\"><a href=\"https:\/\/riskinfo.com.au\/polls\/the-case-for-standardising-risk-commissions\" target=\"_self\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-1228         aligncenter\" style=\"border: 0px\" src=\"https:\/\/riskinfo.com.au\/news\/files\/2009\/05\/vote-now.jpg\" alt=\"Vote Now!\" width=\"108\" height=\"47\" \/><\/a><\/p>\n<p>In the ongoing debate over whether\u00a0risk commissions should be banned, many advisers have suggested that if all commissions are made standard, this will eliminate or substantially remove any conflict of interest, real or perceived.<\/p>\n<p>Do you agree with this view?\u00a0 Our latest poll question asks:<\/p>\n<p><!--more--><\/p>\n<p><strong><em>Do you support standardising commissions for risk products?<\/em><\/strong><\/p>\n<p>While the question is simple, the issue, as usual,\u00a0is complicated.\u00a0 For example, in considering whether commissions should be standardised:<\/p>\n<ul>\n<li>Should we at the same time consider whether upfront commissions should be removed entirely, in order to eliminate churning policies?<\/li>\n<li>Should\u00a0group insurance products be included as well?<\/li>\n<li>Why would the life companies support a move that would reduce their flexibility and remove an area of competitive advantage?<\/li>\n<\/ul>\n<p>In the comments we have received over the course of this year, advisers have consistently maintained that the playing field would be levelled for consumers if all policies paid exactly the same commission, thereby making the selection of product entirely on its merits and its relevance for the client.<\/p>\n<p>On the other hand, there is a\u00a0point of view held by many that supports the argument that in reality, a few points difference in commissions does not influence the adviser in any way when it comes to selecting the best, most appropriate\u00a0product for their client.<\/p>\n<p>But\u00a0while this argument holds true across the industry, the broader issue also involves perception as well as reality.<\/p>\n<p>Perhaps standardising commissions\u00a0is the answer, or part of the answer, but\u00a0this\u00a0may not\u00a0generate a lot of support from the product manufacturers, who strive to position their proposition to consumers and\u00a0advisers in a way that differentiates their offering from their competitors.<\/p>\n<h6>&#8230; instead of standardising commissions, the industry should apply a maximum cap<\/h6>\n<p>An alternative solution previously proposed by advisers is\u00a0that instead of standardising commissions, the industry should apply a maximum cap, which will apply to upfront, hybrid and ongoing commission options.\u00a0 This gives an opportunity for advisers to dial down in order to compete and\/or to reflect the value of the advice being provided.<\/p>\n<p>Some advisers have called on the Government to standardise commissions via regulation, while others have called on the industry to self regulate before it may be forced into action by FoFA reform legislation some time in 2011.<\/p>\n<p>This poll is considering one solution, or one\u00a0part of the solution,\u00a0in relation to the\u00a0future of risk commissions.\u00a0 What is your view?\u00a0 Register your vote and leave your comments, all of which will be forwarded to the Treasury as part of its industry consultation process on Future of Financial Advice reforms&#8230;<\/p>\n<p style=\"text-align: center\"><a href=\"https:\/\/riskinfo.com.au\/polls\/the-case-for-standardising-risk-commissions\" target=\"_self\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-1228         aligncenter\" style=\"border: 0px\" src=\"https:\/\/riskinfo.com.au\/news\/files\/2009\/05\/vote-now.jpg\" alt=\"Vote Now!\" width=\"108\" height=\"47\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the ongoing debate over whether\u00a0risk commissions should be banned, many advisers have suggested that if all commissions are made standard, this will eliminate or substantially remove any conflict of interest, real or perceived. Do you agree with this view?\u00a0 Our latest poll question asks:<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,49,270],"tags":[],"class_list":{"0":"post-8127","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-compliance-regulation","7":"category-polls","8":"category-remuneration"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/8127","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=8127"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/8127\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=8127"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=8127"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=8127"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}