MLC and ClearView Wealth have backed a proposal to keep life commissions, saying the recommendation made by the Quality of Advice Review will support efforts to keep advice accessible to Australians.

The Review released its Conflicted Remuneration Paper this month, recommending that commissions should remain despite acknowledging the current arrangement can lead to a “conflict”.

“Treasury’s Quality of Advice Review is an important opportunity to improve the accessibility and affordability of personal financial advice and ClearView is broadly supportive of the proposals to date,” MD Simon Swanson said in his address to shareholders at the annual general meeting last week.

“We are pleased that Treasury’s observations in relation to life insurance commissions are consistent with ClearView’s longstanding position that consumers should be able to choose how they pay for life insurance advice, be that a fee, a commission or a combination of both.”

He says the proposal to retain the existing exemption for life insurance products recognises the important role of commissions in solving the advice affordability and accessibility puzzle.

“In the current environment of rising interest rates, inflation and heightened market volatility, it is imperative that personal advice is accessible to more Australians.”

MLC Chief Retail Insurance Officer Michael Rogers says consumers should have choice as to how they pay for financial advice.

“A sustainable advice sector supports everyday Australians having access to much-needed financial advice during key life moments,” he said. “Otherwise, financial advice risks becoming the domain of the few who can afford it.”

He says many years of changing laws and compliance requirements have resulted in financial advice becoming unnecessarily complex and as a result, expensive for consumers and practitioners.

“The industry has been haemorrhaging advisers for some time now, significantly reducing the advice capacity available to serve Australians,” Mr Rogers said.

“By maintaining commissions at their current level, while making changes to reduce the cost of advice, we can ensure that more Australians can access good advice.”

The Conflicted Remuneration Paper also made another proposal which it says will help consumers make “informed” decisions: advisers giving personal advice to retail clients in relation to their life insurance needs must have written consent from them to be paid commissions.

But Choice, which has pushed for a ban on all forms of conflicted remuneration, says disclosure is an ineffective form of consumer protection.

“Conflicts need to be removed, not simply disclosed,” Head of Policy and Government Relations Patrick Veyret told insuranceNEWS.com.au.