Removing broker commissions 'would do more harm than good'

Removing broker commissions ‘would do more harm than good’

21 November 2022

Quality of Advice Reviewer Michelle Levy says she understands why consumer groups hate general insurance commissions – but that she cannot see a good reason to ban them.

As previously reported, consumer representatives are continuing their campaign against commissions despite a paper from Ms Levy recommending they remain.

Ms Levy explains her position in a detailed interview with insuranceNEWS.com.au. She says she is against commissions in principle, but that there is no real-world evidence of them causing harm.

In fact, she believes consumers like them, and without them brokers might cease to exist.

“I thought, is there a good reason to undo something that doesn’t appear to be causing harm? I don’t think a case was made to make a change in the context of general insurance.

“In a perfect world, there would be no commissions at large – not only on financial products or insurance products – but we don’t live in a perfect world.”

See Analysis.