Actuaries can meet needs of commission debate
The fees versus commissions debate doesn’t have to be an either/or scenario, and the actuarial profession is in a position to contribute to the solution, according to RGA managing director Pauline Blight-Johnston.
The debate is taking up a large part of everyone’s time purely because commissions have the potential, in limited circumstances, to cause a conflict of interest, Blight-Johnston told the Institute of Actuaries of Australia conference in Sydney yesterday.
While a commission ban on investments would not be good for sales, there would still be a ‘pot of money’ advisers could take a fee from, meaning that it wouldn’t be the end of the world, she said.
But in a life insurance context there was no pot of money to take a fee from, and a system that required an upfront payment would take away from the industry’s ability to meet the needs of Australians, Blight-Johnston said. At a time when there was a chronic underinsurance problem there should be an effort to make that situation better, not worse, she added.
The mistake the industry was making was thinking the solution was either fees or commissions, but it didn’t have to be either/or, Blight-Johnston said. There were myriad solutions, and the actuarial profession could contribute to finding the best solution, she added.
Those who sell advice need to be fairly rewarded, she said. Blight-Johnston said that the question was: how do we reward people who sell advice, and what are the appropriate remuneration structures?
Recommended for you
Adviser losses this week are quadruple the same period a year ago, with the industry falling into negative territory for the last 12 months.
Colonial First State has announced the latest manager to join its Edge managed accounts menu, focusing on providing investors with a strategic income.
Rising advice fees has prompted Radar Results to increase its price guide to a minimum of $3,000 per client to reflect the changing shape of the adviser landscape.
Investment consultancy Ascalon Capital has appointed a new partner, who joins from 20 years at Zenith Investment Partners, as well as a new chief executive amid a “bold new chapter” for the firm.
