In an upcoming opinion piece for ifa sister title Risk Adviser, Shartru Wealth chief executive Rob Coyte said that while there is a legitimate debate over how to attract better educated and professionally minded advisers to the industry, the Trowbridge report will actually do the opposite.
“One way we don’t [help attract more educated people] is by regulating the income these people can earn in a way that Communists would have been proud [of],” Mr Coyte writes.
“The suggestion from Trowbridge and the Financial Services Council to limit the amount of money anyone giving insurance advice can charge is something you will not find in business or finance text books.
“Surprisingly, Trowbridge states ‘the Initial Adviser Payment (IAP) is capped to deliberately fall short of the estimated cost to implement’ – maybe insurance advisers will be able to register as a charity to attain a favourable tax status for such benevolence?”
Mr Coyte suggested the most mutually agreeable solution to any problems in the risk advice market would be a hybrid commission model, but added he did not take any issue with the current upfront commission structure “given the nature of insurance advice and the sales process”.
He said the new obligations enforced by FOFA should be given a chance to work in practice before new obligations or regulations are introduced.
Mention of communism and business models in financial services reminds me of George Orwell’s Animal Farm: “All animals are equal, but some animals are more equal than others”.
No Neil – the only “cap” is on what you want to charge your client (and they’re willing to pay). Why on earth would you accept someone else paying you to advise your clients? Why would they? Advisers need to set their own fees and run their own businesses, just like any adult would. I get accused of being a broken record, but when will you guys get the message about being independent businesses? This hanging off mummy’s teat is embarrassing. While the life offices pay you, they are your masters.
Philip, I ask if you would please cease referring to me as “mate”.
Firstly, that is about the last thing I could possibly imagine and secondly, I would never be able to sustain the requirements of running with your Uber Elitists.
It’s an interesting study of the language you use creating a distinct Us/Them divide. So,as you stated you actually don’t care if anyone changes their business model,it seems to strongly contradict your zealot attitude to continue telling everyone we can all be saved if only we would “step into the light”.
I note you didn’t pick up on my conceited comment, but it doesn’t surprise me that you actually don’t recognise that word.
@ Philip – so I can only assume you agree with the $1,200 cap to be imposed re risk ?
On what basis ?
Could some one point me to a letter I could submit to my member. A greast starting point to writing your own.
Aggree with Mr Coyte. I also object to those thinking they have higher integrity be charging fees rather than accepting commission. Its still a “person thing” if you want to be dishonest, you can still over charge fees. Many F4S models also had the commission tap still on. So you are rubbing shoulders with? or birds of a feather flock together? Put up your hands if you sold ING level premiums and weren’t rewarded for this, but still sold it but to the detriment of your income.
Hey Craig – maybe it’s because vinyl sounds better..? The point is mate that those complaining about their business must surely be open to advice? Otherwise why complain? We, on the other hand have no complaints and simply do what we do and get paid for it by our clients. I don’t care if no one changes their business model – I’d just hope they’d stop whingeing about their failed one!
Gentlemen please. The issue here is not what we call our enemy in ideological terms-lets just call them bastards.
What we the risk advisers should be doing is stopping our petty bickering and concentrate on the foe – the FSC and their core influencers the banks, and, if we have them, our licencees
Right now we need advisers emailing their Licencees to find out what they are doing to fight the foe, because I have not seen much from them yet in the public debate. Don’t bother if your Licencee is owned by a bank or other into.
And those of you who are members/supporters of the Liberal party, or your member is a Lib, you should be on the phones putting the hammer on Frydenberg, who is making the same sort of noises Chris Bowen used to make. Aren’t the Libs supposed to be the party of small business, or is that just humbug for the masses
The best lobbyists at the moment are acting for the pay lenders and the pharmacists
Tony,I think you may been referring to Chris “Blank” and not Craig “Blank” in your last comment as I had never heard of the term “toe tapper” !
Regardless of how clever you think your name calling is Craig “Blank”, and whoever and whatever it was you were trying to describe, a toe tapper is something completely different.
Hi Tony,
You realise that among the Nazis and Communists they are now using terms like “insurance specialist” and “vertically integrated” as perjorative terms.
I don’t know about you – but if I don’t get back to work I end up in seriously deep Trowbridge.
Now we have the self righteous telling other people that they dont know what a communist or a Nazi is . Just for the heck of it I will throw in a new one – Toe Tappers . Toe Tappers are people who are good at telling other people how to perform their jobs , whilst actually having no idea of what this entails . Some people would could call them leeches,and this industry is full of them . They have never produced an SOA, have never fronted a family in an interview (especially after thieving lying fund mangers have blown their hard won coin) , have never really helped anybody in fact . All they have achieved is making advice more expensive.
Their ace card is always to call for more regulation and education .They also feel that the GFC is a footnote in history , when in effect the fallout from this sorry saga is still playing out . The GFC was a result of highly educated MBA’s on Wall street ripping the sytem off, which flowed through to Australia. Toe Tappers still dont get it
“He who controls the money makes all the rules”
A lesson I learned some time back and one that speaks volumes in the Trowbridge debate/debacle.
Thanks for adding some sense to this, Tony Negline. Some of you (Mr Coyte included) have little understanding of what communism is and (sadly) even LESS about capitalism. The insurers are laughing at you (yes, Mr Ginsburg – you’ve got it 180 degrees wrong, but stumbled upon the answer anyway)- THEY are the only true capitalists and they are playing you “advisers” for all they are worth! While you rely on them for your payments you are their servants – but have no relationship with them and nothing in common. (You say you’re working for your clients…but get you paid by the insurers?) Start by charging your clients a fee for helping them. Let them pay you to look after their interests. Only the stupidity of the commission system separates you from being the professionals you so keenly want to be. Wake up; get organised and be professional enough to charge and collect your own incomes from your clients. It’s not rocket science. It will set you free.
If we are in fact seeing the socialization of financial planning, there should be a Financial Planning Levy charged on all tax payers to fund such price ceilings etc. Does financial planning gave similar ‘public good’ characteristic to health and education??
You are half way there Mr Coyle.
These communists have already done irreparable damage to the industry. They have forgotten(amongst a host of other things) about how much they have done to our tax and social security system. Their errors are costing the Australian tax paying population a fortune.
By forcing a larger burden onto DSS and the health system, and letting the insurers off the hook (getting rid of own occupation in super and lightening their risks through careless legislation of the insurance law – removing innocent errors), we will see richer insurers, a poorer government and increased taxes.
This is communism.
Assuming Mr Coyte is a Licencee and has been talking to insurers, how s it going
Any cracks in the wall yet
Well said.
The problem with this whole Trowbridge business is that the industry reacted to an ASIC report which was flawed, inaccurate and did not support the conclusions reached, by initiating LIAWG.
Instead of trying to manage an agreed solution, the industry should have denounced ASIC for stagemanaging a process designed to give them the answers they wanted. Shame on ASIC.
Good article and well rounded opinion of Mr Coyte, after all FoFA is meant to cure the world of the so called ‘villainous’ issues that supposedly are rife within our industry (according to Labor, Choice, ISA, and ASIC – what do all they have in common except some affiliation to the left?)
With all due respect to Mr Coyte, I don’t think he knows much about communism.