In a statement today, YTML said customer take up of life insurance advice could be adversely affected if ASIC’s example SoA for risk products becomes the norm.
According to YTML, ASIC’s SoA does not prioritise the information consumers are most looking for – the advice – and focuses instead on commissions.
“We believe the disclosure of commissions is overplayed in its current position in the SOA. This represents too much focus on remuneration,” the statement said.
YTML has called on ASIC to change the positioning of commission disclosure and to have the document lead with the advice instead.
“YTML has suggested focus groups with quality financial advisers would have shown ASIC the importance of communicating the value of advice followed by remuneration,” the statement said.
The Life Insurance Framework (LIF) and best interests obligations are designed to improve the perceptions of the financial planning industry and provide consumers with greater transparency and disclosure, YTML said.
“That is why it is important to prioritise the message of value of advice followed by remuneration. So, as an industry we focus on the difference advice makes and not price the service in the SoA before the value is communicated,” the statement said.
YTML has suggested that the payment disclosure is moved from page one to page three under ‘summary of recommendations’.
“This would still ensure disclosure is sufficiently prominent but is also provided with context to the value this cost brings to the customer,” the statement said.
What can you expect from a bunch of bureaucrats who have no idea what they are going and never got their arse of their chair to get out in the real world to deal with clients and earn a living.
Ok Chris. Thank you, they don’t have to, they keep getting a raise in line with inflation, courtesy of the Australian taxpayer like you and I. You and I on the other hand have to justify our existence. But I am expected to follow the law made up and enforced by these supposedly, “bunch of bureaucrats, who have no idea what they are doing”, am I not?
My old boss advised me to “concentrate on outcome, not price”. Best boss I ever had.
The regulator ASIC is not interested in advice, or advisers, as they see them to be irrelevant.
It will not dawn on them that they have chosen the wrong path, until one or two the major life insurers fail in Australia and this is quite likely. Government tax takes will drop substantially including stamp duty.
Life insurers now have escalating claim rates and escalating cancellations. Well done ASIC.
ASIC think that someone is going to write a 25 page SOA for $600 and this would of course include the time for the meetings with the clients, and take the legal responsibility for the advice and Pay the ASIC fee to be levied on the industry! This should go into the SOA’s as a disclosed ASIC Tax as that is what it is.
Living in La La land as usual.
Just watch the drop in the insurers cash flows. Watch the panic from the other regulators. All too late.
Lets give it 6 months from 1 Jan 2018 for the first of the failures driven by the FSC and ASIC who all think they are doing the right thing.
The evidence is already clear, even now, before 1 Jan 2018, most life insurers are either selling (MLC), running at a loss (AMP), or considering getting out (Asteron). who are they going to blame after that?
“[i]All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident[/i]”
No takers for AMP thus far. I am curious how long the business can maintain the LEVEL premiums in the book.