Australian Unity advisers will switch to either hybrid or level commissions on life/risk advice from 1 July.
The formal move to the new remuneration regime was confirmed by Australian Unity Personal Financial Services chief executive, Steve Davis, today who said the move had been backed by a vote at an advisor forum.
“While we probably could have brought this policy in a little earlier, we felt this was an important decision and we wanted to take the necessary time to fully inform and consult with our advisers and our Adviser Forum, before making any changes that might affect their businesses,” he said.
However Davis said that notwithstanding the move to hybrid and or flat commissions, some questions remained to be answered.
“Firstly, given the proposed Trowbridge changes potentially represent a significant reduction in acquisition costs for insurers, we have been surprised there appears to have been no suggestion that consumers will benefit from lower premiums,” he said.
“Secondly, if the Trowbridge recommendations are implemented, will that lead to a potential reduction in insurance advice provided to Australians. If it does, the flow-on economic consequences of under-insurance could have tragic consequences at an individual family level and could create significant economic costs to the community. “
“This is one of the other reasons we believe utilising a hybrid commission model is lower economic risk than the proposals within Trowbridge,” Davis said
He said the impact of moving to this model would be able to be assessed over time to see what impact this, together with the introduction of the FoFA regime, would have on the quality of advice issues that were raised in Australian Securities and Investments Commission’s report of last year.
