AIOFP cites rising UK commissions in LIF argument

Mike Taylor

Managing Editor and Publisher

7 August 2023

The Association of Independently Owned Financial Professionals (AIOFP) says it has passed on to Treasury and the Assistant Treasurer and Minister for Financial Services, Stephen Jones, details of risk commissions being paid in the United Kingdom (UK) as part of a discussion around the Life Insurance Framework (LIF).

AIOFP executive director, Peter Johnston has told members that information received during a recent visit to the UK indicated that risk commissions had increased to a maximum of 280% after a four-year obligation period.

He described it as “valuable information that will assist us push for a return of pre-LIF commission conditions over the next 12 months”.

The e-mail suggested that the average commission in the UK was around 260% with the 280% number being rumoured as the highest.

Under the current Life Insurance Framework (LIF) operating in Australia commissions are capped at 66% and the recent Quality of Advice Review recommendations (QAR) suggested that there should be no change to the existing arrangements.

The information provided by the AIOFP to Treasury references the commission arrangements available via UK firm Paradigm Protect.

Assistant Treasurer Jones has previously signalled his concerns about commission-based remuneration.