AFA digs in on level commissions

assistant-treasurer/life-insurance/

24 July 2015
| By Mike |

The Association of Financial Advisers (AFA) has sought to scotch suggestions that the Life Insurance Framework (LIF) in any way sanctions insurers moving to cap level commissions.

Responding, in part, to criticism of the way the AFA and the Financial Planning Association (FPA) handled the post-Trowbridge negotiations, AFA chief executive, Brad Fox, said any move by insurers, through the Financial Services Council (FSC), to collectively cap level commissions would represent profiteering.

He said the LIF had always included a very clear statement protecting the existing level commission regime.

"The LIF agreement between the AFA, the FSC, and the FPA was released on 25 June 2015 by the Assistant Treasurer, Josh Frydenberg," he said.

"It was headed by a clear statement, ‘This proposal is not intended to limit the industry's current ability to operate on a level commission or fee-for-service basis'."

Fox said the Financial System Inquiry recommendation on level commissions did not seek to set the rate, suggesting that it should be left to the marketplace to set.

"Any move to reduce the rate of level commission payments has nothing to do with the quality of financial advice," he said.

"The AFA will strongly resist any concerted actions by the life insurers to collectively set a cap on the rate of level commissions."

"Any move by insurers, through the FSC, to collectively cap level commissions is profiteering at the expense of advisers and their practices. It would not be acceptable. It is outside of the agreement."

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 1 week ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

3 weeks 2 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

2 weeks 1 day ago

One licensee has lost 27 advisers in the past week, now sitting at zero, according to the latest Wealth Data figures....

3 weeks 2 days ago

TOP PERFORMING FUNDS