And this is coming from the very organisation that during the disastrous LIF negotiations sided with the Trowbridge report and very clearly indicated their preference for the reduction of initial commissions to only 30% maximum or a complete abolition if it was shown that the quality of Life Insurance advice had not improved since the flawed ASIC 413 Report.
This was driven by none other than the now Liberal Senator, Andrew Bragg, who was head of FSC policy at the time.
The ASIC 413 Report clearly indicated the quality of risk advice when utilizing the then Hybrid commission model of 80% Initial and 20% Renewal produced an advice success rating in the mid 90% range.
Despite this, the FSC continually and consistently supported the extensive reduction of commissions to appease their Life Insurance company members who were driven by greed & profit by cutting out & cutting down commissions.
This was a major error in judgement.
It has failed.
The Initial commission rate should be returned to 80% & the Renewal commission rate set at 20% with a sliding scale one year responsibility period.
In addition, any insurance policy that was being replaced within 3 years of its commencement date would only be subject to the 20% commission rate to avoid any so called policy replacement or “ churning “.
The FSC needs to publicly state they made a grave error in judgment and support the return to the previous Hybrid model of remuneration immediately before the entire Life Insurance advice business falls completely apart.