After releasing its ‘life insurance blueprint’ to members for consultation early last month, the FPA has said a majority of respondents have supported the proposed remuneration model.
Releasing the ‘blueprint’ to its members for consultation in May 2015, the FPA said of the 1,000 members who responded, 71 per cent supported the proposals.
Fifty-five per cent supported the proposed remuneration model “capped at four times ongoing payments”.
In addition, 67 per cent of members who responded believed the remuneration model would enable them to continue providing insurance advice and services.
The FPA also said its proposal for life insurance companies to implement options to “dial down commission from the product” and dial in an adviser fee gained support, with 78 per cent backing the proposals.
However, of those who disagreed with the model, 50 per cent wanted to reduce upfront commission payments further, while the other 50 per cent wanted to retain the status quo.
Speaking to Risk Adviser, FPA chief executive Mark Rantall said it was not “overly surprising” that members of the FPA want things to remain as they are.
“Change is difficult, and to be fair, the upfront commission payment, particularly for lower value cases, barely covers the cost of providing advice,” Mr Rantall said.
“Some of our members have moved to fee for service and others have the full commission model in place – it does depend on the type of client you are servicing as to what model works for the business.”
Mr Rantall said the next step for the FPA will be to liaise with all stakeholders, including the AFA, to finalise the blueprint.
“We are taking all [feedback] on board and finalising that blueprint and we just continue to work with all stakeholders and to see if we will get an outcome that protects consumers, acceptable for the future sustainability of the industry,” he said.
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