I don't get it.
The initial and second year commissions are disclosed at the point of recommendation in the SOA to which the client signs off before completing a risk application.

On annual review again, risk commissions are disclosed and any recommendation in regard to risk insurances are signed off by the client.

How many times do think this needs to be done ?
Do you think the client is concerned about how much commission an advisers earns since all companies pay the same amount.

There are some who believe that the fee for service removes conflicts.
Well lets start with the value of risk advice and decide what's the right hourly fee ?
Is it $100 per hour, $200 per hour or lets say $300 per hour.
It's been suggested by some in the industry that it takes at least 10 hours from start to completion to get a client on the books.

I know some will rationalise that a fee for service removes conflicts. Well that's not necessarily so if there is no common hourly rate for the fee for service.
Secondly there are some who rationalise that a fee for service is tax deductible, but only in the second year and beyond.
But what's wrong with that premise ?
1. No Life company guarantees annual premiums anymore, even for level rates, so even discounting the premium in the first and subsequent years, no adviser can know whether the current premium won't rise between 30.0%- 50.0% within the next 18 months -2 years..
2. But if we use the example using the fee for service and a $4,000 premium is reduced by 30.0% to $3,100 and the fee for service charge @ $300 per hour results in a non-tax deductible fee based on 10 hours work (viz $3,000), someone is being asked to pay in total $6,100 for something that would have cost $4,000 on a commission based arrangement.

Is there any adviser who thinks that they can get a client to pay 50.0% more ?
But humour me some more.
If the insurance company increases their premiums by 30.0% then that initial discount is wiped out in year 2.
But if the fee for service adviser continues with his $3000 fee for service charge and assuming the client gets a 30.0% tax deduction , the client still ends up paying $6,130
And if you compare that with the commission model, the client pays with a 30.0% increase, the client pays $5,200 in year 2.

I can't even guess what the cost of acting in claim situation would be under the fee for service model but I know what it would be under a commission model.