In an email to members, AIOFP executive director Peter Johnston said following the announcement that the Life Insurance Framework bill had been introduced to Parliament, he was moving to “plan b” to combat the detrimental effects the reforms will have on consumers.
“The bill has been referred to the Senate for consideration where we will have commenced our lobbying on certain senators who are receptive to our concerns,” Mr Johnston said.
“The key to this issue is the long-term effects it will have on consumers being exposed to the significant shortcomings of institutions selling flawed products directly to them, the nation’s underinsurance dilemma and destroying small business,” he said.
The AIOFP has previously appealed to Assistant Treasurer and Minister for Small Business Kelly O’Dwyer to amend the reforms, which Mr Johnston said would “devastate” independent adviser numbers.
Last week, Ms O’Dwyer introduced the life insurance reform legislation into the House of Representatives where she praised the FSC, AFA and FPA for collaborating to achieve “sensible reforms”.
“I want to specifically acknowledge the work of the AFA, the FPA and the FSC in working together to achieve sensible reforms for the sector which will benefit consumers through the provision of more appropriate advice and long-term sustainability of the industry,” she said.
“ASIC identified a strong correlation between high upfront commissions in the sector and poor consumer outcomes, including high lapse rates where consumers are churned through products.
“It also found unacceptable levels of poor quality advice – in particular, 45 per cent of cases reviewed [which] involved high upfront commissions failed to meet the relevant standard for financial advice. This is unacceptably high,” Ms O’Dwyer said.
Ms O’Dwyer, the [b]minister for Financial Institutions [/b]has colluded with her FSC institutional buddies to completely screw the small business advisers.
O’Dwyer and the Liberal party should be ashamed of the blatant transfer of even more power to the large banking and insurance institutions that will no doubt line their pockets with more profit at the expense of advisers and consumers.
O’Dwyer and the FSC are close to pulling off a major con job on a “Churning” issue that has never, ever been statistically tabled to any extent that it exists industry wide because the insurance companies refuse to or are unable to produce the data.
O’Dwyer, please go back and work for NAB and stop pretending to be the minister for Small Business. Your twisting of the facts is beyond belief.
If the financial planning industry cannot offer scientific compelling evidence that is contrary to the research findings by ASIC, then it faces a situation such as the Life Insurance Framework (LIF) legislation. It is clear, the government is no longer listening to any argument for or against that is not supported by compelling evidence. Lobbying will not work that is not evidence-based.
Ms O’Dwyer clearly in bed with the big end of town. How she can claim to represent small business is one of the greatest mysteries of the world.
Kelly O’Dwyer has clearly swallowed the FSC lobbying hook, line and sinker. The ASIC review was NOT indicative of the whole profession. It was a carefully targeted investigation of advisers who were thought to be at high risk of churning. Did she even read the report?