Do shelf space fees still exist?

Members of a Parliamentary Committee have suggested that shelf space fees have simply morphed into education fees under arrangements negotiated by product manufacturers and licensees.

The Parliamentary Joint Committee investigating the life insurance industry has interrogated insurance industry executives about the workings of approved product lists (APLs) and whether the product manufacturers are paying what amounts to shelf-space fees.

NSW Labor Party Senator, Deborah O’Neill used a public hearing to question Zurich executives and suggested that “shelf space fee had turned into ‘Now we pay an education fee’”.

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“We have heard that the quantum of money is quite significant,” she said. “This could potentially be a corrupting behaviour that is not necessarily good for the industry or for clients who are seeking insurance.”

However, Zurich Financial Services Australia chief executive, life and investments, Tim Bailey said this was not the case and that the new APL standards ensured the need for transparency.

 “…our view is that there need to be probably more than two providers to provide appropriate choice across APLs,” he said. “I think the balance, if approved product lists get wider, is that then really requires advisers to have the full, detailed knowledge across all of those products.”

“I think there is a trade-off between the breadth of choice and their ability to fully understand the breadth of propositions, especially given that we are in a very competitive market where all of us are continuously looking to improve our customer proposition.”

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Who is telling this stuff to Senator O'Neill?

Robin I think its more how do they come up with this stuff? By raking through old parlimentary papers from 15 years ago? Oh trail commission, yes bring that up, oh shelf fees, ok bring that up too! The issue is who is telling these pollies this is incorrect! Not our supposed industry rep thats for sure or else they wouldnt be wheeling out such tripe! We are such a easy target its laugable. Our industry is a laughing stock in this area of public rebuttal, and so are we for not taking control of it and letting the same old magoos drive the car, and the same old washed out unionists that cant get a job in the real workd continually get up on the soap box and score points with the public at our expense, very sad

Perhaps, or perhaps it is the system that allows anyone to be a senator (so long as they are voted for). Anyone can run the country without any qualifications. Can you imagine what the news reporters would do if the head of the CBA bank was based on a popular vote with no consideration of the person's knowledge and skills in banking....

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