Following recent uproar in the risk advice community concerning the Trowbridge recommendations, Perera Crowther Financial Services conducted a survey to better understand the effects the recommendations will have on advisers’ businesses.
The survey, completed by 308 risk advice business owners, found 178 small businesses would be forced to close their business either completely or partially if a level commissions structure and initial advice payment of $1,200 were to be introduced.
With the complete or partial closure of these businesses, a total of 771 advisers and staff members would be made redundant, the survey claimed.
Providing comments with their responses, one adviser said they would sell their business or “restrict the number and type of client” they give advice to.
This was echoed by another adviser who highlighted that they would place less emphasis on offering risk insurance to clients or even focus on “lower value premium clients”.
“As a risk only specialist there will be a significant income reduction from new business. I will have to consider what staff I will be able to retain,” another adviser said.
Speaking to Risk Adviser, principal Sam Perera said he plans to release the results to all respondents so they can take them to their respective federal member for parliament and continue campaigning.
Mr Perera added that he will also take the results to his federal member, social services minister Scott Morrison, and including Assistant Treasurer Josh Frydenberg to further raise awareness of the implications these recommendations could have for business owners.
maybe if all of us, advisers and support staff, lobbied our Fed & State MP’s and also our respective industry bodies we might get a small ear lent to us. Letters in industry mags and blogs wont get the real facts to the policy makers or professional lobbyists. Its time for each of us to stand up and be counted and keep standing until the idealist academics get out of our industry and stop dictating how much or how we earn our living. Imagine if other industries were told how much they can charge and by what method? any takers?
Many insurance plans take many hours to prepare and $1,200 in the first year would often be insufficient to remunerate the adviser. We have recently spent at least 25 hours on a plan, and in this instance Trowbridge’s fee scale would be totally inadequate. I would suggest that a small plan with little consideration for anything but the basics would fit into Mr Trowbridge’s ideas. I do not understand how Mr Trowbridge arrived at his conclusions and I would welcome a discussion with him about this.
A proper insurance plan has many considerations and the adviser must be compensated for the time spent to give that advice.
The difficult question is who pays the fee.
Does anyone have any practical suggestions on the fee for service debate and if the fee is around $20,000 would a client pay the bill?
Gerard
Its just common sense that if you reduce the financial rewards for work then there is less work. It is stupid to say that lower pay leads to better quality work.
Great initiative Sam