In its post-FSI submission to Treasury, ClearView said it has cautioned that recommendations made by FSI chairman David Murray and LIAWG independent chair John Trowbridge will “threaten the sustainability” of advisers.
“ClearView [has] warned that recommendations made by the FSI and the recent Trowbridge Report, which proposed mandating level commission payments and/or heavily capping initial advice payments and commissions, were excessive and would lead to undesirable outcomes,” a statement from ClearView said.
“Changes to adviser income structures must be carefully assessed in terms of their likely impact on incomes and how advisers can or will likely respond,” it said.
Commenting on the submission, ClearView managing director Simon Swanson said he has urged the government and regulators to end their “misdirected and narrow fixation” on fixing the problem of churning and instead to focus on turning advice into a profession.
“Level commissions are not the answer. Nor is a restrictive and inadequate initial advice payment allowance and ongoing commission. In fact, they are both well wide of the mark,” Mr Swanson said.
“Any remuneration design should support quality advice. While it should discourage over-selling and churning, it must foster competition and take into account the real and tangible upfront costs associated with delivering life insurance advice.”
In ClearView’s submission, the life insurer pointed out it has recommended that a remuneration policy needed to continue to allow for some upfront payment at the point of client acquisition and product replacement.
“A level only payment structure which excessively defers adviser payments, if otherwise adequate, would only increase the cost of providing advice and cover, making it more expensive to consumers,” the statement said.
Old Risky & Mark Harris, the biggest winners from this FSC collusion will be insurers with a big presence in the non advised direct and union super space, whose policies have lots of built in exclusions that non advised consumers generally don’t notice.
So don’t expect any pushback from TAL.
Why on earth are so-called “professional” advisers waiting to be paid or even supported by product manufacturers? Risk Advisers, like any other professional, need to grow some gonads and charge their clients for their work and set themselves free from the (also, so-called) “cartel”. They aren’t on your side. They’re talking about you as leeches who won’t let go of mummy’s hand so they have to carry you… but that’s just to others, not to your faces. Like any business they need to stand on their merits. So do you/we. Our clients are happy to pay us for good, unbiased and helpful advice and service. That includes the follow-ups required in claims, etc (for those who bring up that chestnut). As long as you demonstrate your value you’ll be appreciated and paid. I explain to my clients that our aim is to provide 4-5 times the value of our fees. They get that.
Congrats to Clearview at least one manufacturer is supporting the Independent Advisers. Yes were is AIA, TAL, & Zurich, its time for them to step up and voice their opinion on this outrageous attack on free enterprise. Also doesn’t the Trowbridge solution stink of RESTRICTION OF TRADE, I would hope a government that is suppose to support the ideals of FREE TRADE and SMALL BUSINESS would simply reject these recommendations outright.
Where the hell is the support against this rubbish from AIA, Macquarie, TAL & Zurich. We need more than warm & fuzzy motherhood statements
It appears Suncorp Bank (sorry Asteron ) have gone to play with the big boys.
Now that I will remember, if I survive
Sorry fellow advisers but you’re all missing one HUGE point here – if the remuneration recommendations of the NAZI report oops I meant Trowbridge report make it through then insurers stand to make HUGE profits on new policies written. Trowbridge recommends a one-off payment of $1,200 PER CUSTOMER so under the current arrangement if you sell a Life, TPD & I.P. policy then we get paid on all 3 policies but with the new “PER CUSTOMER” recommendations mean that if we sell a Life, TPD & IP policy then the maximum amount we get paid is $1,200 even if the premiums total $5,000! So who keeps the difference? Are those savings passed on to the customer by way of premium reductions or will the insurers come up with a convenient “premium increase” excuse to justify their new profits? All this has done is allow insurers to make more profit and further increases the under-insurance issue amongst Australian consumers, all of which is exactly what the FSC cartel have been trying to avoid!
There is of course no reason why individual insurance company’s can’t introduce this remuneration strategy immediately of their own accord if it is such a good idea
What hypocracy acting as a cartel and hiding behind a doctored inquiry
Something for the ACCC to consider
Looks like Clearview has broken ranks from the FSC cartel. Most other insurers sent out a namby pamby email to advisers saying “how much they care” and how “we must all work together to address the issues”. Clearview seems to be the only one so far to take a stand against the damage that Trowbridge is likely to inflict on consumers and ethical advisers. Good on them.
Nows can all the other non bank insurance companies stand up and show advisers you will not follow the fsc CARTELof insurers