Synchron director Don Trapnell said the requirement for life insurance advice to take account of a client’s entire financial circumstances and goals meant that clients looking for simple advice on which policy was right for them were likely to be priced out of taking up a retail life policy.
“Clients are likely being over-serviced and consequently overcharged because of legislation brought in by a government that appears to believe Australians are too stupid to know what they want, need and can afford in terms of life insurance advice,” Mr Trapnell said.
“Australians are not stupid and should be free to choose.”
Mr Trapnell argued that current licensing obligations around risk advice were “the very definition of a nanny state”, and that in the process of seeking to provide advice in the client’s best interest, risk advisers were being forced to charge for full advice that the client did not need.
“Ironically, the advice may therefore not be in the client’s best interests at all,” he said.
“A much better approach would be a requirement for life insurance advisers to provide appropriate advice – that is, advice that is in line with the advice the client is actually seeking, and actually needs.”
Mr Trapnell said a lack of regulatory relief for risk advisers was expected to push more consumers into inferior direct insurance products.
“This is likely to ultimately see fewer people appropriately insured and the social security burden on the government further increase,” he said.
“And as I have said before, that is not in anyone’s best interests.”
Risk advice is a tough one under BID. If the client doesnt die or become disabled then they are in a worse position
This is dinosaur thinking and is why the regulator and the consumer has little trust in our industry. To suggest you should be exempt and not have to act in your clients best interests because you are just advising on insurance is a disgrace. Don you are better than this, if not, time to leave the industry.
What a terrible idea.
Yep don’t make us work in the customers best interests coz we’ll make less money. Thanks for nothing!
It’s 2020 not 1999.
Living in the past Mr Trapnell….and to be blunt some of the most inappropriate advice I have seen has been from AMP Risk advisers flogging full coverage. You’d be better served by focusing on and adapting to the future, and questioning why we got here in the first place to avoid similar Government intervention in the future.
Not sure what AMP has to do with Synchron but maybe I missed that link. You are however correct that the horse has bolted.
Don as always your Plain Speaking is fantastic, do you think these embiciles in Canberra comprehend.
Time to stop living in the past.