1. Is this the end for commission? The move towards fee-based advice LIMRA Webinar, 22 June 2011

2. Commission in Australia, the Netherlands and the United Kingdom Brian J Eves Research Analyst, LIMRA Europe, Middle East & Africa June 2011

3. Commission in Australia, the Netherlands and the United Kingdom Drawbacks of Commission Based Selling  Commission-driven financial advisors are essentially product salespersons;  Even where a product presents itself as suitable different providers pay different commission rates for the same or similar products.

4. Commission in Australia, the Netherlands and the United Kingdom Australia The Future of Financial Advice legislation, effective July 1 2012:  Ban on conflicted remuneration structures;  Statutory duty for financial advisors to act in the best interests of their clients;  Introduction of advisor charging to increase transparency and flexibility of payments for financial advice;  Expansion of low-cost ‘simple advice’ to improve access to and affordability of financial advice.

5. Commission in Australia, Netherlands and the United Kingdom Netherlands Commission ban on financial services products from 2013:  Applies to bank advisers and independent advisers  Applies to mortgage and protection products (as well as investment products)  This is part of an ongoing process that started in 2006 after seven million high-cost insurance policies were mis- sold to consumers.

6. Commission in Australia, Netherlands and the United Kingdom United Kingdom The Retail Distribution Review (RDR) main provisions:  Commission for financial advice on investment products to be banned;  Two main levels of advice: independent and restricted. Non- advised services, including execution only, will still be allowed.  Investors to be told how much advice is going to cost and how they will pay for it;  All investment advisers to be qualified to a new, higher level, equivalent to the first year of a degree course.

7. Commission in Australia, Netherlands and the United Kingdom Possible effects of banning commission in the UK  A growth in the market for non-intermediated sales of simple investment products;  Loss of commission stream may translate into fewer opportunities to help those on modest incomes;  Growth of bancassurance and worksite marketing;  ‘Simplified advice’ could be increasingly important for the mass market.

8. Commission in Australia, the Netherlands and the United Kingdom To find out more … http://www.limra.com/members/abstracts/reports/10789.pdf