Life advisers must prove need for commissions

life/risk financial advice Stephen Jones remuneration Commission

3 March 2021
| By Mike |
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Life/risk advisers are going to have to make their case for the retention of commission-based remuneration in the same way that mortgage brokers did, according to the Federal Opposition.

The Shadow Minister for Financial Services, Stephen Jones, made clear that he remains to be convinced about commissions-based remuneration in the life insurance industry but acknowledged the case that had been made by mortgage brokers on the issue.

“Conflicted remuneration is a problem but mortgage brokers have been able to make a case for commissions,” he told an AIA Australia adviser summit.

Jones said that it would be up to life/risk advisers to make a similar case, but that before adopting a firm position he would be awaiting the outcome of the Australian Securities and Investments Commission (ASIC) review into the Life Insurance Framework (LIF).

Asked to define what he regarded as “conflicted remuneration” to be when a product manufacturer paid a fee to the adviser related to the sale of their product – something which had been similarly viewed by the Royal Commissioner, Kenneth Hayne.

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