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Insurance brokers in Australia are primarily paid by commission — a percentage of the premium paid to the insurer, typically ranging from 5% to 20% depending on the type of insurance. Some brokers also charge a professional fee for complex placements. By law, they must disclose their remuneration to you in a Financial Services Guide (FSG) before providing advice.
Not necessarily. Brokers have wholesale market access and relationships with underwriters that can offset commission costs. For complex or hard-to-place risks, brokers can negotiate premium reductions, broader coverage terms, or special conditions that more than cover their commission. For simple retail covers, a broker may cost the same as going direct. Always ask your broker to explain their remuneration and provide a cost-benefit comparison.
A Financial Services Guide is a document that licensed financial services providers — including insurance brokers — are required by law to provide before giving advice. It must disclose who they are, what services they provide, how they are remunerated, and how to make a complaint. Reading the FSG helps you understand any potential conflicts of interest before the broker makes recommendations. Request one if it is not provided upfront.
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