Banking Royal Commission: Freedom Insurance Shares Plummet On Direct Phone Sales

  • Oct 04, 2018 AEST
  • Team Kalkine
Banking Royal Commission: Freedom Insurance Shares Plummet On Direct Phone Sales

After stopping new sales and revealing plans to more than splitting fifty-fifty its workforce, Freedom Insurance shares have fallen as much as 27 percent. Responsible for some of the evidence revealed at the banking royal commission, amid a regulatory crackdown on direct sales it has announced an overhaul to its business model. For its aggressive sales tactics Freedom Insurance came under fire, use of cold-calling and high commissions will service its existing policyholders but all new business has been suspended leaving the future in dark.

To assess future options for its business model, Freedom will continue to work constructively with its business partners. So far this year, the stock has now lost about 80 percent of its value. Craig Orton, who at the royal commission represented the company, will be replacing Keith Cohen who was Freedom's chief executive and has left the group.

Freedom sold out of policies like accidental death cover to a young man with ‘Down syndrome’ with a shocking recording of the sales call played in an inquiry. For most of its products Freedom had decided to cease outbound phone sales but Mr. Orton, however, was unable to provide any documentation of the major shake-up. By more than 50 percent workforce was slashed i.e. from 200 to 90 with remaining staff to continue renewing current policies and servicing existing policyholders with immediately suspending all new direct sales of insurance products including funeral cover, its main revenue source.  

They expect these cuts to reduce operating expense by at least $15 million, including redundancy payments offset by $4.8 million in restructure costs. The company is not expected to generate revenue from an upfront commission but will continue to receive trailing commissions and fees from existing policies unless it restarts sales under a new business model in line with the commission. It will be interesting to see what’s left for Freedom without the model of direct selling. However, Mr. Stewart was seen apologizing and admitted the sales agent who made the calls should have for previous concerning behavior been fired earlier.

Freedom had engaged into unacceptable conduct in selling insurance to Mr. Stewart's son as Rowena Orr QC, Senior counsel assisting the commission told commissioner Kenneth Hayne. Freedom Insurance is not a member of the Financial Services Council which represents the life insurance industry.

Dividend Stocks To Buy

The Income available from dividends remains attractive for many investors.

We take a look at the best yields on the market and assess what they say about a company’s prospect.

One Thing is certain, though, Australia interest rates are still low, making income difficult to come by and keeping the focus for many investors on high yielding stocks. Kalkine’s team of analysts bought you handpicked report for “Top 25 Dividend Stocks For 2018.”

ASX-relevant Special Reports are published year-round to provide a detailed analysis into an investing opportunity or a potential risk to your portfolio.

Click here to get your free report.


The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.


All pictures are copyright to their respective owner(s) does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.


There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK