FSC research highlights importance of commissions in life/risk

Mike Taylor

Managing Editor/Publisher, Financial Newswire

20 October 2022

The Financial Services Council (FSC) is arguing that the introduction of scalable advice for life insurance together with a simplification of comprehensive advice would see a million more Australians have the life insurance they need. 

Releasing new research undertaken by NMG Consulting, the FSC made clear it was backing the Quality of Advice Review to recommend the implementation of a scaled advice model  

With respect to the Life Insurance Framework (LIF) and its impact on life insurance advice, the NMG research found that commissions on advised life insurance “remain an important component of adviser remuneration” with less than 10% of life insurance advice being placed without any commission. 

It also noted that most consumers were not willing, or able, to pay for an upfront fee for life insurance. 

Commenting on the research, FSC chief executive, Blake Briggs said the Government had a rare opportunity to deliver affordable and accessible advice to consumers via the QAR. 

“FSC research shows how the unmet life insurance needs of consumers can be addressed by comprehensively reforming the regulatory framework, not just tinkering with it,” he said. 

“If nothing changes, the number of life insurance policies held by Australians is set to reduce by 17% in the next five years, leaving Australians without cover when they need it.