Disqus - Friends of NobbyK

Re: Life insurers take responsibility

Roger Smith — Tue, 31 Mar 2015 00:28:08 -0000

Merv.
Do yourself a favour. Read the comments posted on IFA. You are without doubt a "lone voice".

Re: Riskies in last ditch appeal on level commissions

Roger Smith — Tue, 31 Mar 2015 00:57:09 -0000

Paul
I would have thought that you may have learnt something over the past 27 years - obviously not much by your inane comment!

Re: Riskies in last ditch appeal on level commissions

Roger Smith — Tue, 31 Mar 2015 02:26:25 -0000

Harvey, as usual sound well thought out comments! Unfortunately the Pareto Principle is at work again?

Re: Life insurers take responsibility

Roger Smith — Tue, 31 Mar 2015 20:52:27 -0000

Let's get some fairness into this debate!
I do not believe that it is appropriate for anyone who does not derive the bulk of their income from the sale of Risk Insurances to be making any comments whatsoever about "someone else's" future basis of remuneration being their livelihood.

Re: Why I hate commissions

Roger Smith — Thu, 02 Apr 2015 05:05:19 -0000

Wow !
Here we go again .... the same old rubbish about "business person" versus "sales person".
Christopher, I am proud to be a salesman. People do not buy Life Insurance
it is sold. A sales person has people skills, empathy integrity amongst other
things and believe it or not they can be great business people as well!
Why can't you be both so that the client reaps the benefits?
When you have been in the Industry any "real period of time" and when you have earned your stripes we might listen to you. It's interesting that the only real support you receive is from one of you co workers (Chris Bates).
What's your hidden agenda?

Re: Riskies in last ditch appeal on level commissions

Roger Smith — Fri, 03 Apr 2015 01:19:23 -0000

Sorry Paul but I am confused! Firstly you talk about on-going bi-annual reviews then you talk about a review fee every few years then you infer that you run a Risk Business but you are then talking about My Super. I hope your clients are not as confused as I am or you will have no hope of getting any fee from them.

Re: AMP reduces upfront life insurance commissions

Roger Smith — Wed, 29 Apr 2015 00:03:37 -0000

I assume that the "upfront" commission ban by AMP
today is step one of AMP's “Managed Transition” with more bad news to follow.
What was AMP's submission to LIAWG? What happened to their motto “AMICUS CERTUS IN RE INCERTA" (a sure friend in uncertain times)? I see nothing friendly
to Advisers in AMP's “knee jerk” reaction. The solution to the current problem
requires ALL PARTIES to pay a price NOT JUST ADVISERS. Effective immediately
L/O's should increase ALL IN FORCE RENEWALS from 11% to 30%. This will protect
this "in force" business. There will be a cost but it's the L/O's that want change also. In exchange Advisers with 5+ years service will accept Hybrid commission only (say 80/30) for 12 months then all future business income would be Level at 30%/30%. Advisers of less than 5 years need a 3-5 year Hybrid transition period. I have seen many changes in my 47 years in the Industry. The proposed changes are the
most far reaching and will decimate our Industry.

Re: AMP reduces upfront life insurance commissions

Roger Smith — Wed, 29 Apr 2015 00:20:40 -0000

RJL - This is only step ONE of AMP’s “Managed Transition” with more bad news to follow! The objective is very clear and it’s not Hybrid. Don't be naive to think that it is the way things are going to pan out for the future. There is no time for complacency here!

Re: AMP reduces upfront life insurance commissions

Roger Smith — Thu, 30 Apr 2015 18:12:56 -0000

BREAKING NEWS!

To ALL PARTIES involved in deciding the fate of Risk Adviser's future remuneration in Australia PLEASE NOTE that there are NO queues of people clamouring to buy Life Insurance at Advisers office doors.

THESE QUEUES SIMPLY DO NOT EXIST

The premise that you have been operating under in determining OUR FUTURE AND THE FUTURE OF YOUR STAFF is totally incorrect.

Advisers work extremely hard to FIND A CLIENT IN THE FIRST PLACE then look after their clients simply to generate a fair and reasonable reward for effort.

Re: AMP reduces upfront life insurance commissions

Roger Smith — Fri, 01 May 2015 22:08:26 -0000

BREAKING NEWS!

THESE QUEUES SIMPLY DO NOT EXIST

The premise that you have been operating under in determining OUR FUTURE AND THE FUTURE OF YOUR STAFF is totally incorrect.

Most Advisers work extremely hard to FIND A CLIENT IN THE FIRST
PLACE then look after their clients simply to generate a fair and reasonable
reward for effort. Heaven forbid that the underwriter were to knock back the business or that there was an issue with the client's bloods /medical, or simply that the client doesn't proceed.
Historically, Adviser remuneration has been high in recognition of the difficulty of the role an Adviser has and the variables that exist, some of which are beyond the Advisers control. Instead of talking about reductions in remuneration levels why not improve Life Office efficiencies. If everyone is talking about current Industry costs being unsustainable fix the inefficiencies. Has the FSC or John Trowbridge looked into this aspect of the Industry?

The discussion around Life Offices reducing premiums rates if Hybrid commissions were to become the norm further reduces Adviser remuneration. It's a double edged sword!

Re: Findex to move to fee-only risk model

Roger Smith — Thu, 21 May 2015 16:50:03 -0000

Stop it Paul - you are making too much sense!
How can anyone disagree with the fact that FEE FOR SERVICE DOES NOT WORK FOR RISK INSURANCE.
Once again it's people who are not risk writers making all the noise!

Re: Imagining the future of life insurance

Roger Smith — Thu, 21 May 2015 17:04:18 -0000

Mike, from the information available it would appear that most of your business is focussed on Financial Planning, so I understand why you only have clients paying you on a fee for service basis. Please don't muddy the waters by suggesting that people are happy or would even contemplate fee for service for Risk only advice! It's fanciful and ill informed to say the least!

Re: Busting the Risk Commission Myths

Roger Smith — Fri, 12 Jun 2015 03:57:33 -0000

Sorry Sue, but I am in my 48th year in the Life Insurance Industry and I'm not afraid of change, in fact I have seen a lot more change than I believe you have and have survived and prospered through hard work and creating a point of differentiation between our
business and others.

I do not believe that a "fee for service" model will work and I believe this has been proven overseas. Those advisers in our Industry who say it can work, most likely choose to provide a more broad based range of financial service products. They probably chose to limit their activities in the risk area due to the challenges of working in this area and the need to do a lot of hard work to be a "specialist" in this area or for some other reason.

It is very clear to me that if the Trowbridge Report recommendations are implemented along lines resembling anything like that what has been documented, the Life Risk Specialists will be decimated and you will be dealing in an Industry resembling "daddy day care" in the future. The massive bank of Industry knowledge will be lost forever which will in turn have significantly detrimental effects in the risk advice space.

Having run the distribution of two Public Companies with hundreds of advisers I
think things need to be put into perspective. The premise that most advisers
earn massive income levels is a false premise. The belief that their decision
where to place business is significantly influenced on the highest up front
commission is also false. Some advisers are very well remunerated and this
level of income is a reflection of how good they are at their job. We work in a
very difficult Industry - one that the majority of people could never survive in. Advisers are charged as you know with the "clients best interest duty" so if some advisers have not been able to legitimise the basis of their recommendations then the overall system has failed.

We live in a world that rewards people well if they are successful at what they
do. That is all that is happening in our Industry and you should not apologise
to anyone for being successful.

Our Industry needs "fine tuning" not a major overhaul. Life Offices also need to become more efficient and provide improved, streamlined service standards. Current service standards are second rate at best.

I believe a combination of the fine tuning and L/O efficiency improvements will
achieve some the desired outcomes Trowbridge is looking for.

We must remember that one of desired outcomes is "to restore trust and
confidence in the Retail Life Insurance area". How can this be achieved if
the most important participants (Risk Specialists) are driven away from the
Industry by a heavy handed decision making process.

Re: Busting the Risk Commission Myths

Roger Smith — Mon, 15 Jun 2015 18:06:14 -0000

Hi Sue. Thanks for your response. I think my biggest concern is the extent to which this issue has divided an Industry in a relatively short time frame. Some advisers have options but unfortunately based on my experience many will not. Knowing of all the good work you have done in the past, you have a lot of work ahead of you to help some of these people.

Re: Commissions more ‘ethical’ than fee for service

Roger Smith — Mon, 15 Jun 2015 22:27:19 -0000

Sorry Peter I don't understand. How could you be critical of this article if "you say" "it will result in the industry being regulated to a greater extent than we would like". I thought you were in favour of fee for service which is what the regulator is moving towards. You operate a Financial Planning business where 54 people on your LinkedIn page acknowledge your "Top Skills" as Financial Services compared to 22 people who acknowledge your professionalism in Risk Insurance. I suppose that one could conclude from this that your Risk Advice is secondary to your Financial Planning and the reason you work on a FFS basis. It's about time that "part time" Risk Advisers stay out of this issue, as it only those who devote their entire business model to Risk Insurances that are going to be affected by the proposed Trowbridge recommendations.
I for one know that fee for service DOES NOT WORK FOR RISK ADVICE!

Re: Risk remuneration policy announced

Roger Smith — Wed, 24 Jun 2015 20:32:50 -0000

IN MEMORIAL

The Life Insurance Industry
in Australia passed away on the 25th June 2015 (suddenly but not peacefully).

The Funeral services will be
held progressively between 1st January 2016 and 1st July 2018.

The Life Insurance Industry was
established in Australia in the 1830s to look after the well being of widows and children and to protect Governments by reducing the welfare burden of vulnerable people on Government expenses .

The Life Insurance Industry will
be survived by what can only be described as a half hearted attempt to placate
the Financial Institutions of Australia.

In lieu of flowers, memorial
donations may be made to the families of all those hard working, well
intentioned, passionate risk advisers left behind in the wake whilst trying to
look after their "clients best interests".

Our deepest sympathies are extended
to what will become the remnants of a great Industry.

Rest in peace!

Re: The Life Insurance Framework

Roger Smith — Thu, 25 Jun 2015 22:55:20 -0000

Has anyone ever seen a requirement on an SOA to disclose the
retention period? Maybe this is what will now become a major focus for future
SOA's. It might go something like this.

Mr/Mrs client, the remuneration that I ACTUALLY earn may be
nothing like that stated in dollar terms and percentage term in your SOA. In
fact I could well earn absolutely nothing and after the "one sided"
recent negotiations in our Industry if I (survive) a period of three years I
will in fact receive the amount stated in the SOA. If you for whatever reason
change your mind or if the Life Office rejects your application I will earn
NOTHING. If you become influenced by someone else in the Industry to change
over servicing to them they will in fact get my remuneration BUT I will be
holding the responsibility for the 3 years anyway. Have I made the issue of
remuneration clear enough or would you like to speak to John Trowbridge. John's
remuneration is based on 100% of what he earns he gets to keep - like most
other Australians who work hard EXCEPT RISK ADVISERS. You asked about what I
have to pay tax on. Well it's interesting that I have to pay tax on 100% of the
income I receive even though there is quite a strong possibility I won't
actually get to keep it and I cannot make provision in my business accounts for
that contingency. Sorry what was your question? Yes, asking why anyone would be
stupid enough to work under those terms is a very valid question. The only thing
in my favour is that my life expectancy (keep your fingers crossed) is 19.2
years so it looks like I have to make a business decision to stop writing
Insurance policies at the latest in 16.2 years but perhaps it will be a lot
earlier than that..

Re: The Life Insurance Framework

Roger Smith — Fri, 26 Jun 2015 19:28:07 -0000

3 year responsibility period - consider this!
We did some business on a client 12 months ago. Not replacement business, New Business. His premium has now come up for renewal (10/7). Premium Increase on a 45 year old of 23.6%. At this rate his premium will double in just over 3 years. How can I accept the newly "negotiated framework" when some premiums are doubling every 3 years. This puts into question the client's ability to maintain the policy. It's the L/O's that determine premium levels not advisers, so we have not control over our futures based on a 3 year responsibility period. "Clients best interest" has gone out the window for "L/O's best interests".
SHOW SOME SIGNS THAT YOU UNDERSTAND OUR INDUSTRY BY APOLOGISING FIRSTLY AND THEN CHANGING THESE ABSURD RULES!

Re: Insurers acknowledge adviser ‘clawback’ concerns

Roger Smith — Mon, 29 Jun 2015 22:00:36 -0000

It's not enough to talk about the 3 year claw back challenges - they are unworkable. Just work together to have it changed if you want any new business inflows.

Re: Restoring confidence and trust in the industry

Roger Smith — Wed, 01 Jul 2015 21:41:24 -0000

Sorry Damien. This is not "just the start' Ask almost every risk writer and they will tell you 'it's the finish'

Re: AFA seeks to influence clawback details

Roger Smith — Tue, 21 Jul 2015 17:09:58 -0000

Let's be fair about this the AFA and others have demonstrated an amazing capacity to NOT BE ABLE TO NEGOTIATE. Following this round (current) of discussions Risk Advisers are likely to end up with a 6 year responsibility period. How can anyone believe that in the event of a claim that the "Clawback Period" could apply. My advice is that the AFA are playing in the seconds and the only point of discussion should be that a 3 year retention period is TOTALLY UNACCEPTABLE if anyone wants our Industry to survive. The commission reduction is quite enough thankyou - one year retention should still be in the mix. Remember John Trowbridge DID NOT THINK THE 1 YEAR RETENTION WAS AN ISSUE. The AFA and the L/O's really did a good job on us.

Re: AFA seeks to influence clawback details

Roger Smith — Wed, 22 Jul 2015 01:05:02 -0000

Simple Maths

A 50% reduction in Adviser remuneration PLUS a 200% increase in the Adviser responsibility period = 100% Life Office gain, 0% Client gain, 0% Future for Risk Advisers and 0% FOFA outcome.

Congratulations to all those involved in this ludicrous outcome - you must all be very proud of yourselves.

Re: Clawbacks should not penalise advisers: TAL

Roger Smith — Mon, 27 Jul 2015 22:18:20 -0000

No further discussion is required. If the "powers that be" are focussed on whether a claim should be included as a clawback then everyone had lost the plot. For the future of the Industry go back to square one and think things through more logically.

Re: Time to survive and thrive

Roger Smith — Wed, 12 Aug 2015 21:28:53 -0000

Aaron - sorry but the 3 year responsibility period has changed our Industry forever. In my 48 years in the business (and not one years experience 48 times) we have accepted change as a normal part of life BUT not this change. Anyone who views a contingent liability over their business for 3 years as acceptable change has no idea of reality. A 50% reduction in upfront commission is acceptable but not the 3 years. Likely scenario is that there will be a reduction of 50% - 60% new business which is not in the "clients best interest" and the "underinsurance" problem will be compounded. In 1972 I stood outside Young and Jacksons Hotel in Melbourne handing out "how to vote cards" because of Labors proposed changes to our Industry.
We have now been hit with "friendly fire" which WILL NOT BE FORGOTTEN.

Re: Adviser-insurer ‘cross industry fighting’ must end, ASIC says

Roger Smith — Mon, 17 Aug 2015 21:47:37 -0000

Our Industry has been built on passion and belief and I don't think that will ever change. Our Industry may be decimated by these reforms but our passion and belief will never be taken away. Take pride in what you have done for your clients.