Australia: 60% believe removing commissions will increase underinsurance

| 24 Sep 2019

About 3 in 5 of advice clients believe the removal of life risk commissions would increase underinsurance in Australia.

This is according to MetLife's second annual “What Clients Want: 2019 MetLife Adviser/Client Research Report”.

Matt Lippiatt, MetLife head of retail sales, revealed three in five consumers and small business owners with life insurance purchased through a financial adviser believe removing life risk commissions would have a detrimental impact on Australians and further increase the underinsurance problem.

If commissions were removed in the future most current clients wouldn't expect it to change their willingness to continue using an adviser. 47% of individuals with life insurance and 33% of SMEs said that this would not make a change, while 26% of individuals and 23% were less likely to see a financial adviser.

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However, while the majority of those surveyed were aware that insurers pay commissions to advisers, many did not know how much they receive.

The survey also found that consumers who have had a review within the last 12 months are 2.1 times more likely to refer their adviser to family and friends, the survey findings show.

However, it also revealed that 30% of consumers and 50% of SMEs plan to change their current adviser or stop receiving advice in the next 12 months, citing high fees and lack of contact.

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The in-depth online survey was completed in June 2019 with 1,298 respondents. These included 797 consumers who have life insurance purchased through a financial adviser; 213 with 2-20 employees who have life insurance purchased through a financial adviser; and 288 consumers who are very likely to see a financial adviser about life insurance in the next two years.

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