{"id":8457,"date":"2010-11-10T10:47:32","date_gmt":"2010-11-09T23:47:32","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=8457"},"modified":"2020-02-06T08:12:59","modified_gmt":"2020-02-05T21:12:59","slug":"future-of-risk-commissions-the-uk-experience","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2010\/11\/10\/future-of-risk-commissions-the-uk-experience\/","title":{"rendered":"Future of Risk Commissions – The UK Experience"},"content":{"rendered":"

United Kingdom regulators recently\u00a0reversed their policy on banning risk commissions because risk commissions were determined not to represent a conflict of interest.<\/p>\n

Well-regarded UK insurance expert and advocate, Nick Kirwan<\/strong>, who represents the Association of British Insurers<\/a>\u00a0(ABI) has been in touch with riskinfo to outline the rationale behind the decision of the UK authorities to allow the continuation of risk commissions:<\/p>\n

<\/p>\n

The \u2018Retail Distribution Review’ RDR (the UK version of FoFA) comes into effect in 2012.<\/em><\/p>\n

It bans commissions on all investment business. \u00a0However, it has now been agreed not to ban risk commissions although there will be some additional disclosure requirements where investments and risk business are arranged together.<\/em><\/p>\n

The key argument was that, for risk business only, commissions are clearly aligned to the consumer interest…<\/h6>\n

The key argument was that, for risk business only, commissions are clearly aligned to the consumer interest.\u00a0 Advisers get a clawback if the customer lapses the policy – this means the adviser has a vested financial interest in ensuring that the customer is satisfied with their purchase over time.<\/em><\/p>\n

The same cannot be said of commissions on lump sum investments which are fully earned up-front.\u00a0 Against this, the regulator identified no consumer detriment from risk commissions and the industry (ABI) presented clear consumer research evidence that consumers will not pay fees for risk advice.<\/em><\/p>\n

Within Australia, Mr Kirwan urges consultation and engagement with the Federal Treasury:<\/p>\n

“… I hope the industry is fully engaged with the Treasury because the argument is too important to be decided without a clear understanding of all the wider issues – including the impact on the degree of under-insurance.”<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

United Kingdom regulators recently\u00a0reversed their policy on banning risk commissions because risk commissions were determined not to represent a conflict of interest. Well-regarded UK insurance expert and advocate, Nick Kirwan, who represents the Association of British Insurers\u00a0(ABI) has been in touch with riskinfo to outline the rationale behind the decision of the UK authorities to […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,270],"tags":[],"class_list":["post-8457","post","type-post","status-publish","format-standard","category-compliance-regulation","category-remuneration"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/8457","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=8457"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/8457\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=8457"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=8457"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=8457"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}