Life/TPD Insurance Broker through Super

And they arent allowed to call themselves those things if they are. All FP advice is biased - It must meet client best interests but bias can be good and bad.

Few products pay Commissions. Even insurance is switching to a front end fee v's commission. Old school product sellers may still do commission but its old school. Fee and costs disclosure is all supposed to be clear and gets a client sign off. I would argue like accountants many financial planners dont know how to sell. Client thinks the $3000 fee they get for the insurance is a lot but when it took ten hours and supports a office etc it starts to look like a bargain. And the client doesnt pay it. They may have paid $0 for all the advice, time, SOA, comparisons and advice.

If a client has super a fee for advice may not always be clever. Eg a flat fee of $2K and no fees from the insurer paid to the adviser. Client would be $2k worse off !!

 

In my experience I have never not had the insurer pass the commissions or advice fee on to clients. The insurer never really pays for the advice they just time-average it by increasing the insurance premium. They always get their money. It looks better for the client because the insurer is paying but they usually just end up with higher premiums... would love to be pointed to an insurer that pays advisors but does not increase the premium to reflect.

 

What?

Premiums are fixed. Advisers are paid by the insurer. If they are paid. The premium isnt inflated

 

Premiums are certainly not fixed - I can choose to reduce the commission. I can take anywhere from 100-0% of the commission and the premium will reflect it. I can't decide what the base premium is at 0% commission but don't fool yourself the insurance company recovers the cost of commissions paid by increased premiums. That's why it can be so valuable to find an adviser that always sets it to 0% and charges a bigger up front so they're unbiased and recieve the same amount no matter what.

 

Super ? Commissioned advisers are a rare problem these days and are a bigger problem - They almost always fail the best interest test for the client if they are on commissioned remuneration. Agree upfronts are a bit more transparent.

The upfront works two ways - Sometimes the fee paid by the insurer wont even cover the effort. And others may exceed the agree fee. Yep - Discount it. The advice needs to address this anyway. Depends if its $100K or a $1m policy. Occupation issues, health and more.

 

I think you're referring to industry super fund advisers only - if you want retail insurance that is tailored to the client you wont get advice on this from most industry funds as they just have unitised insurances.