Reflecting on the FSI recommendation to review upfront risk commissions, the AFA has called on the government to strike the “right balance” in any policy response.
In a statement issued last night, AFA chief operating officer Phil Anderson said that while the association is “conscious of the concerns expressed” around upfront risk commissions and the incentives for product churning, that business realities need to be considered.
“The outcome needs to address the significant time and cost involved in giving initial strategic advice on life insurance and implementing life insurance business,” he said. “This is a matter that is currently being considered by the joint AFA/FSC Life Insurance and Advice Working Group. “The AFA is of the view that financial advisers should be able to be appropriately remunerated for the work they do.” More broadly, Mr Anderson said the AFA welcomes the government’s commitment to consult widely before implementing any findings of the report.
“This is a critical report that is likely to have significant implications for both consumers and participants in the industry,” he said. “We particularly note the measures focused upon competition and consumer outcomes.”
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