Commissions not driving adviser behaviour
Over the last 12 to 18 months, there has been a continual flow of papers, reports, and articles aimed at reducing intermediaries’ life insurance commissions in the life insurance markets in Australia and New Zealand.
The latest contributions from the Reserve Bank of New Zealand (RBNZ) and the New Zealand Institute of Economic Research (NZIER) are fairly typical of the tone, content, and quality, of the previous contributions.
The response to the latter report from Dr Mike Naylor hits the target in that inadequate data creates questionable conclusions. Despite the lack of provable, testable data than can be replicated for verification, NZIER comes to the conclusion that reducing commissions would be beneficial, despite the likely loss of advisers from the industry.
The (incorrect) presumption here is that lower commissions will encourage advisers to leave the industry.
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