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Life insurance - the high cost of bad advice

Hat tip to Rob Stock for this article in the Sunday Star Times today.

Amongst a raft of other things, Rob says "So bad have things got that the bosses of some of the largest [life insurance] firms now openly claim commissions are distorting advice, stunting product development, and misleading the public."

The article offers these examples - Asteron 160%, AXA 163%, Tower 170%, Sovereign 192% and ING with a whopping 220%! That's a lot of motivation to sell you an ING policy.

One idea floated in the article was that all life insurers should offer the same level of commission - not too high of course. With commission levels no longer a factor, all insurers would be forced to compete on product, service and price.

What an idea! And wouldn't that be great for consumers!!

He says there'll be a followup next week covering "What advisers say about commissions, and a survey of exactly what commission all the big insurers and fund managers are paying"

Have to admit I'm looking forward to that.

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