Sentry’s Murray Hills said that dealer groups and industry stakeholders plan to call on Mr Turnbull to revise the proposed changes to the retail life insurance industry which were released in June.
He said that Sentry advisers would also join with the principal of Sentry-aligned practice Cost Benefit Analysis, Roger Smith.
“I have said on many occasions that most consumers understand and are aware how complex the financial world has become and for the need to seek the guidance of qualified financial specialists to provide them with value-for-money personal advice and peace of mind with strategies that safeguard their personal, retirement and wealth creation aspirations,” Mr Hills said.
Mr Hills reiterated concerns that the three-year responsibility period was “unworkable”.
“The proposed changes have quite literally rocked the foundations of the advice industry, which is comprised of thousands of small business owners, to such an extent that the sector is now fragmented and in my view in danger of imploding,” Mr Smith said.
Speaking to ifa, AFA chief executive Brad Fox said that if Mr Turnbull were to reshuffle his cabinet and replace Assistant Treasurer Josh Frydenberg, this could prolong the government’s response to ASIC Report 413.
“It is reasonable to expect that [if Mr Frydenberg was replaced it] may take longer to resolve the government’s response to ASIC Report 413, and Recommendation 24 from the Financial System Inquiry referring only to level commissions, as any new Minister would need to be brought up to speed,” he said.
At the same time, AIOFP executive director Peter Johnston said the leadership change could be a boon for the industry’s attempts to stave off the life insurance reforms.
“With a national election only 12 or so months away and the Coalition’s need to improve their standing in the polls, they will have little choice but to act in the best interests of consumers, the nation’s underinsurance dilemma and start listening to small business,” Mr Johnston said in an email to association members.
Mr Johnston had contacted the AFA and FPA to see if they would be prepared to meet to place pressure on the government.
Other industry associations were also hopeful that Mr Turnbull’s leadership would assist the wealth industry.
FPA chief executive Mark Rantall said the leadership change may have an “effect on some very important reform announcements”.
Specifically, these include “in relation to FSI, the PJC Recommendations for financial adviser education, professional standards and ethics and the Life Insurance Framework that were imminent”, he said.
To: Josh Frydenburg – I listened to you address us advisers at the SPAA conference Feb 2015 and felt encouraged. Now, I feel let down by you because your actions prove you have not bothered to understand the actual problem. Bugger.
Tony, the little people out here in the community do matter. We spend money in the community, employ people and guess what? We actually provide a service which protects families in the face of serious illness and death. We are only one part of a large economy, but please don’t come on here and tell us we are not important. Perhaps you would prefer to let the big life insurance companies drive us out, as they are attepmting to do. Do you really think they will employ more people or do a better job protecting families than independent advisers? If so, it shows you know nothing about this great profession.
Well,Tony…master provocateur.
I am going to go out on a limb here and ask you to confirm if you are in fact THE Tony O’Leary, the ex-Press Officer for then PM John Howard and a key figure in Tony Abbott’s election campaign ?
I quote from Michelle Grattan in The Age on Sept 20, 2003..”Come in Spinners:all the Prime Minister’s men.
“O’Leary, 56, is called O’Grumpy by Howard”.
mmmmm…..that makes sense now.
And as reported you were the spin doctor for Tony Abbott’s election campaign, I can well understand why you wish to vent after the recent course of events.
If you are in fact not THAT Tony O’Leary, but another with same name, would you please explain your experience within the financial services profession in order to allow the readers to accept your comments or alternatively, completely disregard them.
Tony Oleary supporting small financial planning businesses rather than currying favour with the big instos will create jobs. The economy needs service industries to fill the void left by the mining sector.
I would have thought turning around the economy and employment rather than worrying about insurance advisers who have milked the industry for years churning clients, putting enough business through several life insurance companies to maximise their conferences(holidays) would be of less importance
It is now the right time for Malcolm Turnbull to allow the Minister for Small Business, Bruce Billson to address the issues of misuse of market power, corporate collusion and the impact on small business in a number of areas.
The so called “effects test” should now be allowed to operate correctly in order to assess whether corporate power and influence were indeed a contributing factor regarding the outcome of the Life Insurance Framework.
Whilst some contributors to the process strongly recommended either no commission or very limited commission payments to advisers with no mandated commitment to a reduction in insurance premium costs, it smacks of corporate players manipulating the process in order to maximise profit at the expense of small business.
The message to get out there is that Josh Frydenberg has shown a clear lack of understanding when it comes to the financials behind the commissions. This most obvious example is him saying to the media that the new commission being discussed will lead to reduced commissions and therefore lower costs to the insurer, which he will enforce leads to lower premiums.
Reducing the upfront and increasing the trail commissions only shifts the payments to later years, but does not reduce the net commissions paid. The calculations for this have been done multiple times by multiple different stakeholders.
This shows that Mr Frydenburg is making policy on the run and has not sought to understand the economics behind the change, nor the impacts of these changes.
The life insurance industry and consumers need someone making the decision that is prepared to listen to all sides and do the homework to understand. Josh Frydenburg has shown that he is not that person, and is more interested in making nonsense statements to the media to bolster the public perception of himself.