Industry consultancy firm Certainty Advice Group has backed comments from John Trowbridge, saying it is also calling for structural change in the industry.
Earlier this month, former APRA member Mr Trowbridge said that the way advisers are remunerated has caused a structural problem within the life insurance industry.
Responding to this, Certainty Advice Group founder Jim Stackpool said Mr Trowbridge's comments should be viewed as an opportunity for advisers to look at new ways of delivering advice.
"What's different about financial services industries is the speed of converging changes caused by technology, regulatory reform and consumers demanding more value for money," said Mr Stackpool.
"It's the confidence and sense of security that great advisers have always provided their advice to clients. Shifting their remuneration models to better reflect the value they add is becoming more and more a necessity."
Mr Trowbridge said at the FSC Life Insurance Conference in Sydney on 16 March that commissions have become the normal form of adviser remuneration.
He further added this creates a conflict of interest, especially where the initial commission on a new policy and replacement policy exists materially higher than renewal commission.
Principal of TWD Troy MacMillan said he feels for those advisers who still regard their business success as dependent upon commissions.
"Good advisers realise that their clients are not buying products but relationships with providers of products," said Mr MacMillan.
"Many advisers still aren't confident enough to uncouple their products and their pricing."
Scott Girdlestone, director of wealth advisory for William Buck, said his firm has worked hard to remove any real or perceived conflicts regarding how we recommend and price our advice.
"Our clients not only accept it, we know they find our approach refreshing."
Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.
You can contact him on [email protected].
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