Value still key in insuranceBY BEN COLLINS | THURSDAY, 2 AUG 2012 11:30AMThe remuneration components of the Future of Financial Advice reforms may be distracting from the needs of consumers when it comes to insurance, said Brett Clarke, chief executive officer, retail life, TAL. |
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This will create mayhem for accountants in the insurance and mortgage industry. If the accountants stay in the industry to sell insurance and loans I cannot find an easy solution to their problem: If the accountants are to charge a fee for service on an insurance or mortgage plan only a very few clients would be willing to pay a fee which could be most significant. The result for clients would be lower premiums but many would not see it that way.
Alternatively, if a fee is charged and commission is rebated to the client and the policy is subsequently cancelled within say 12 months then it is quite possible that the agent will lose out plenty.
As a result of our dilemma, the client will go around the corner to the financial planner who will not charge a fee but is able to accept commission. Accountants will therefore be competing at a significant disadvantage to other planners.
I do see a solution: the accountants resign their membership of the ICAA, CPA etc and become CFPs. This would not be a very satisfactory solution but if the monetary benefits were significant then the accountants would have no choice.
I have one simple question: if the CEOs etc of fund managers receive a salary from companies which make most of their income from commissions, asset based fees or other non timed based methods will they have to resign from the accounting bodies because they are in breach of APES 230.
Alternatively can accountants in private practice receive a salary from their companies on the same basis as the big end of town.
Gerard Wilkes FCA CFP FFin