As the backlash against the Trowbridge Report continues, Perera Crowther Financial Services director Sam Perera conducted a survey to assess what proposed changes in risk remuneration would mean for the future of 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, the survey also found that 771 advisers and support staff members would lose their jobs.
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 ifa sister title Risk Adviser, Mr Perera said he plans to release the survey results to all respondents so they can take them to their respective federal member of parliament and continue campaigning.
Mr Perera added that he will also take the results to his own 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.
We don’t do much risk now, mostly wealth and strategic advice.
With Trowbridge in force we would no longer do risk at all.
Very short sighted.
Last time I saw regulated prices there was a communist government in play.
Can you hear the bells tolling, signalling the death knell of an industry, just as the ISA, Labor and ASIC are all aiming for…
As disturbing as these findings are, there is a much bigger issue, which is the impact on consumers.
With fewer consumers getting quality insurance advice, they are more likely to end up in dodgy direct and union super products with lots of fine print exclusions. The outcome of the FSC sidelining advisers (with the assistance of Trowbridge & Frydenberg) will ultimately be reduced claims payouts. A great result for the insurers, a terrible result for consumers. Advisers are just collateral damage.