Risk-focused financial planning dealer group, Synchron has welcomed the fact that the final report of the Royal Commission did not recommend an end to vertically-integrated advice businesses, with its principal Don Trapnell claiming such structures help, rather than hinder clients.
However, Trapnell has signalled that he believes the industry should be lobbying with respect to the status of life/risk commissions when the Life Insurance Framework (LIF) is reviewed in 2022.
Responding to the Royal Commission, Trapnell said two recommendations - the review of life insurance commissions in 2022 and the removal of grandfathered commissions in January 2021 were causing advisers some concern.
“There was always going to be a review of life insurance in 2022, it was part of the Life Insurance Framework,” he said. “The only difference is that Commissioner Hayne has said we should look at life insurance commissions with a view to bringing them down to zero, unless there is a commercial reason not to. “
“There is a very obvious commercial reason not to and we will be talking to the Government to explain the Dutch experience whereby commissions on life insurance were removed with serious negative consequences for the consumer and the economy,” Trapnell said.
“Surely it must occur to the Government that the Dutch market is the only market in the world that has removed commissions on life insurance.”
Trapnell said the recommendation to ban grandfathered pre-FoFA investment commissions was likely to worry affected advisers, who would need support to deal with the change.
“One way of looking at it though, is to realise that advisers selling books of clients that were generating grandfathered commissions were receiving about two times revenue,” he said. “January 1, 2021 is two years away, so the recommendation means advisers with these books will receive two times revenue, therefore the net effect is zero.”
Comments
Synchron why would you defend dodgy planners and the practices which ripped off customers?
None of the policies acquired by through an adviser ripped customers off. It was all the policies offered under general advice and direct to the consumer which were identified as rip offs.
In fact. The policies acquired through an adviser (which pay commission to that adviser) are in most cases much cheaper than the policies the client gets by going straight to the provider.
On another note. The sales reps who work for the product providers will always be paid commissions, they will just be called bonuses which will still be linked to revenue. Removing commissions for advice will just remove access to advice for clients and they will have to go directly to the insurance companies and get rubbish, expensive junk policies.
James22 you truly are deluded. The royal commission exposed many advisers / planners who ripped off there clients. Guardian Advice, AMP amongst many others
Stop trying to pull the wool over the publics eyes. You are just a wolf in sheeps clothing. I hope they implement all recommendations from the Hayne review and advisers and financial planners will be confined to the dustbin of history. Fellow customers save your money and do your own research. At least it will be in your interest not a financial planner like a parasite eats away your retirement nest egg away.
Maybe do some research before commenting. Those AMP advisers and Guardian advisers were charging fees for no advice for investments. Not insurance advice.
Anyway. I challenge you to sort out your insurances on your own without the help of a financial adviser and then let any Synchron (independent) adviser have a look at what you’ve done. I will guarantee (unless you are a nurse or professional sportsperson) you can get both a cheaper and far superior policy which pays commission to that adviser. You will also get a policy which is not cancellable by the insurer and get some help at claim time without having to pay Maurice Blackburn 30% of the claim amount. Go on..... take the challenge. Do your best the see what an insurance adviser can do for you
You do realise that the person who sets up the insurances directly also gets paid bonuses in productivity, which is basically a commission.
Just try dealing with the claims decliners from an industry fund or direct insurer on your own.
It makes me sick that people who know nothing about insurances or financial planning are able to make laws to the detriment of the Australian population as a whole
James22 it is disappointing that you would try to mislead people with such fake news. Why the lies? Here are the facts.
Guardian Advice was a predominately insurance business with minimal investment business. ASIC was provided documentation from Suncorp. The documents paint a picture of a financial planning arm without proper systems and controls, that didn't train its advisers properly and had a culture that buried bad news. Indeed its planners had created a culture of churning and burning life insurance products, to pocket piles of commissions - no matter the cost to customers.
Guardian Advice went on voluntary ASIC undertaking and was subsequently closed by parent Suncorp. James22 there are insurance providers that provide insurance that is non-cancelable and are cheaper then using an adviser by a minimum of 20%. Heard of Noble Oak? James22 you obviously like to mislead people with fake news and work in your own best interest and not in your clients best interest. You seem to be pushing me to Synchron. Are you a Synchron adviser? It sounds like you are. I would hate to be in Synchron Compliance department now knowing that I have representatives misleading and working in their own best interest instead of the customers best interest. ASIC should be prosecuting Synchron for your actions as they are responsible for you.
Another misleading statement that majority of advisers are honest is a lie. Time after time financial planners say it is just a few rotten apples but this has been found not to be true. In fact the majority of advisers work in their own self interest and dishonest. We see this time and time again with never ending rorts and scandals both reported in media, royal commissions etc. In fact financial planners are regarded by most Australians as being dishonest and untrustworthy and the occupation rated one of the lowest trusted occupations. I look forward to a day when financial planners will work in the interest of their clients. Lets face it financial planners are not even regarded as a profession. Why not give financial planning to a real profession like accountants
Synchron I thought you had control over your financial planners. I think ASIC should do something and ensure Synchron is not an environment like Guardian advice .
Just tested your theory in regard to Noble Oak. Same benefit amounts, same structure. Noble Oak cost $165.43 per month for White collar employee. MLC (the cheapest in this case) monthly cost $141.43.
There were 6 other insurers with cheaper premiums than Noble Oak. Also have you looked at the ratings given to Noble Oak policies by IRESS. They are no where near as good as the ratings on the advised policies. For your information IRESS are basically a team of lawyers who go over the definitions in policies and rate the chance of being paid under these definitions.
Also, good to note that Canstar gave Noble Oak a 5 star rating for value for Direct Life Insurance. Meaning that they are one of the cheapest of the direct policies, HOWEVER 7 OF 10 ADVISED POLICIES WERE CHEAPER.
So Noble Oak doesnt pay commission to advisers, however they do pay bonuses to sales staff. Basically commissions. Go on, set the policy up yourself with Noble Oak and have fun dealing with their claims department on your own when you are sick. You will get a mental health exclusion with whatever insurance company you decide to go with anyway.
Im not a Synchron adviser by the way. They wouldnt have me because i came from a bank dealer group.
What. No reply Customer? Hard to argue with facts isn’t it.
In fact if I were to recommend a Noble Oak policy to a client I would be in serious breach of the best interests duty and likely have my authority to provide advice revoked. The only way they are allowed to flog their JUNK policies is because they sell direct to the customer outside of the rules which ensure that when an adviser sets up a policy, it is the best for you in your current situation.
How do you explain their and your lie that their policies are 20% cheaper?
Maybe call Don from Synchron and get him to refer you to an adviser to fix up your insurance problems
Good one comrade Customer. As a fellow socialist troll, I also never let the truth get in the way of the Utopian objective. The new Marxist/Postmodernism philosophy teaches us that the facts are just a perception and we should never let the facts deter us from our objective to wipe out the free market. Lying will bring forth the economic chaos we need to collapse Australia's capitalist system. It doesn’t matter that the Royal Commission found that AMP death cover policies sold through a financial adviser had the lowest level of claims denied of any life company, below 1%. In fact, all life policies sold through a financial adviser delivered a significantly better consumer outcome compared to the policies sold through direct distribution. What matters is the destruction of the free market. To do this we need to destroy financial advisers by using disinformation at every opportunity. We don’t care that the majority of financial advisers are decent, hardworking, honest people who, no doubt, have suffered significant stress and anxiety for many years due to the industry being targeted by the unions so that our comrade industry super funds can gain control of the nation’s superannuation. What matters most is that we satisfy our bitter resentment from not being able to clime the capitalist hierarchy of competence. We need to destroy the hierarchy of competence by establishing a new economic hierarchy of thuggery to make everyone equal (except for us because we deserve more). With financial advisers confined to the dustbin of history people will have no alternative to industry super funds. But that is the best outcome for everyone because we socialists are morally superior and justified in our actions to wipe out financial advisers. We only want to take total control of everyone's retirement nest egg for the good of the nation as a whole. Don’t worry, I know socialism has failed in every country where it has been tried throughout history, however, we are different because we a morally pure. When we have total control, your money will be safe.
Comrade Tony
"The truth is out there"
I gather you are like agent Moulder from the x files but for financial planning.
Keep trying Tony !! You may find a financial planner that works in their clients best interest. there are thousands of dodgy planners out there!!!
I look forward to hearing from you when you find one
Tell me Customer, when you went to Noble Oak, how did you pay for your Life Cover? Is the cover your your wife/husband, your kids, your adult children, your parents etc. Do you think it matters? Same with TPD, any tricks there? Trauma - any tricks to this cover or did you just put some numbers on the dart board and have a shot? Income Protection - well, I would love to see what your research told you on this one.
You claim it is so simple, demonstrate by explaining the issues please - should be simple for someone as informed as you claim to be.
Customer. You are just like all the other paid socialists that troll this websites, boring and predictable. You have no ideas yourself rather the leftist ideology has you. You can't think for yourself, you just babel out the same mindless low-resolution garbage that the rest of your mates do over and over. Your vicious untruthful remarks can only be a result of one of two things. You must either have a low IQ and are unable to think for yourself or you are an extremely reprehensible nihilistic creature hell bent on destroying society. If you want to criticize fine, but base your argument on facts rather than just being a slanderous buffoon.
Hey Dumb Dumb (alias customer). Have a read of this https://www.yourmoney.com.au/wealth/insurance/why-you-still-need-life-in...
Ill narrow it down to the most poignant part of the article - Advised insurance accounts for 50% of premiums and 70% of claims paid.
Call Don from Synchron. He would go out of his way to help everyone.
James22 thank you for your comments and posting of interesting article. Where did you get "Advised insurance accounts for 50% of premiums and 70% of claims paid"
I could not see this claim in the article. Please advise
Read the article again.
If the sales reps at the direct insurance companies and in the industry super funds had to abide by the best interests duty when sorting out insurances they would be in breach of their duty in almost every case.
The only way anyone should ever get Trauma, TPD or income protection is through a qualified adviser. You will almost always get a far superior and substantially cheaper policy. Even when that policy pays a commission to an adviser.
Customer,
Superannuation, pensions and personal insurances are complex financial products. Super rules keep changing and there can be hefty penalties for getting it wrong. If you can do it all yourself then go for gold. The vast majority of the public would receive great benefit from seeking professional financial advice. Remember, you don't know what you don't know.
Customer, you are I suspect right in every opinion you have in your entire life. It is absolutely clear that you are paid by others and have never dealt with individuals directly. I can see you now, sitting at a computer paid for by someone else and to keep that money rolling in to maintain your lifestyle, you need to create an environment that justifies your existence - and your motto is doing it for the general good. You are conflicted and if you had any value, you should be able to bill directly those that you claim to help. Essentially, you are conflicted. Your conflict is in my mind a major issue but but is over shadowed by the fact that you will not be held responsible for your actions - and you should be.
I suspect you will have moved on within a very short period of time to another crusade and spend you life never looking back at the damage your ill developed view cause and retire believing you have made the world a better place - but take no responsibility. Seriously, you should be accountable for your action and what you will term "unintended consequences" which was once call incompetence.
Anonymous have you no concept of business or customer service?
The customer is always right!!!
Customer - as I suspected. James 22 has delivered you some fact and basically as it stands, you look like a complete idiot. We are all happy to have a debate but you seem like a little leftie who is out of their depth pretending to defend the public yet all you do is destroy. You started he debate so do the right thing and defend your opinion with some fact to back up your claims - otherwise you are defeated and it has been proven that your view are simply incorrect, wrong and ill informed.
Customer, ASIC's new funding model - bases the fee on size of the business, with a minimum of course. Is that a commission?
I guess the answer depends on whether you are getting a service from ASIC? It could simply be a "fee for no service".
The Customer,
You don't need advice from a financial planner, or an accountant for that matter. I think you need to look in other areas.
It may also assist in the future to know that some industry funds do employ financial planners who provide advice that is not restricted to just superannuation. Its amazing how many industry fund members need and want advice (that they pay for).
James22. You bring up a valid point. Noble Oak claims to be 20% cheaper then adviser policies
I do not know what to believe. I would consider speaking to Don from Synchron but from moneymanagement article he is busy lobbying.
I think I have been misled by media I am willing to give a financial planner a go. Any tips to what financial planner would be the one to see. Independent, Industry , Bank? Please advise
Customer. Don and Synchron are the good ones in our industry who truly put the client before anyone else. I am an adviser who left Synchron to another unethical dealer group, run by unethical accountants and then Synchron allowed me back only to ask me to leave as I was disenchanted and wanted to provide advice under the general advice model. That was middle of last year. I consider myself as one of the people who actually put customers before myself. As does Don and all the advisers who are lucky to be at Synchron. However I wouldn’t cross the T’s and dot the i’s just because the law said so. So Synchron had to let me go. Call Don, he will look go out of his way to look after you. I guarantee it
Now just so you know. I provide advice under general advice. I get paid the same and do way less work. It costs me less to do the same as I used to. However. When something goes wrong the client cannot sue me. As it was all under the guise of general advice. Whilst I wouldn’t ever do it, providing advice under general advice allows unscrupulous sales reps to sell sell
Sell without the protections provided under the advised insurance process. Plus the policies are cheaper and better.
Bad people will take advantage of every situation. There are just bad people. At least when you get personal advice you are protected by The overzealous compliance we have to adhere to
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