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Perhaps the Life Insurance companies should have stood up to ASIC, the Govt, Trowbridge and the FSC during the LIF negotiations and supported the experienced, professional and loyal Risk Insurance advisers when it really mattered.
A consequence of the lack of a very determined opposition by the Life Insurers to the then proposed structure of LIF is now an ever increasing depletion of experienced advisers who no longer can effectively justify spending the time and expense on placing new business at a significantly reduced commission basis.
Soon to transition to an unworkable 60% upfront model from 1st Jan, 2020, the state of the Life Insurance market from the IFA space will become significantly worse.
When the ASIC 413 Report was released, the Life Insurance companies should have immediately consolidated and put forward strategies to restrict commission payments or eliminate any advisers who were repetitively replacing business. It required a determined and coordinated approach and the advisers who were acting professionally should have been protected from what is now an unworkable outcome with still some corners calling for the abolition of commissions entirely....a move that would all but destroy the industry and leave millions of people without adequate insurance cover and significantly less advisers to assist with advice, strategy and claims management.
In order for this industry to return to a model of sustainability, the commission structure should return to the previous Hybrid model of 80/20.
To offset any concern in relation to policy replacement, the commission paid on any replacement within 2 or 3 years of the policy commencement date should be limited to a Level commission only basis.
This would eliminate the possibility of adviser's receiving Upfront remuneration at all within that period.
The answer at the time was relatively simple, but ASIC was on a mission with an agenda and the Govt was completely un-supportive of really listening to those who knew.
Kelly O'Dwyer's repetitive commentary at the time was that these changes would " enhance consumer outcomes".
Nothing could be further from the truth when the average consumer will not be able to access quality Life Insurance advice at an affordable cost base.
They will then proceed with either the wrong type and level of cover unsupported by a dedicated and experienced adviser or simply go without and expose themselves, their family or businesses to financial risk.

of the calls to be reasonable and fair