ClearView says the FSC draft standard released yesterday does not provide guidance on how broad that “range” should be, and mirrors the current situation where large institutionally-owned licensees can use their discretion to enforce extremely narrow and restrictive APLs.
The draft also ignores the contentious issue of shelf space fees and shuns the Trowbridge report’s recommendation that APLs should include at least half of all life insurers, the firm said in a statement.
ClearView also said the draft imposes only two key requirements on Australian Financial Services (AFS) licensees – to apply a reasonable basis to APL construction with a “range” of insurers and to have a process for “off-APL recommendations”.
ClearView managing director Simon Swanson said the draft standard confirms that the industry cannot self-regulate and will achieve nothing in terms of increasing competition, choice and customer best interest, describing the draft as a ‘Yes Minister’ document.
“Despite being charged by the government 18 months ago to develop a new APL standard for the delivery of greater product choice and accessibility for advisers, the FSC has produced a superficial document that will fail to stamp out anti-competitive practices by the large vertically-integrated institutions and, therefore, won’t lead to profound, lasting change and a better deal for consumers,” Mr Swanson said.
“Open APLs are essential if advisers are to provide objective advice in the client’s best interest. However, the FSC’s dependent relationship with the dominant, vertically-integrated players means that there will be no meaningful progress in the absence of regulatory action.”
ClearView said it will continue to petition the government for mandated open life insurance APLs for all licensees, and is currently preparing a formal submission in response to the FSC draft standard.
As one of the highest paid insurance company CEO’s, I didn’t hear Simon Swanson lambasting paying advisers 50% less for business! Yes their should be open APL’s, yes the FSC are a dodgy corrupt cartel who are a disgrace but so too are all the CEO’s who are simply out for themselves. The days of a partnership between advisers and insurers are well and truly gone and replaced by total distrust.
Does Clearview not have it’s own bunch of vertically integrated and conflicted advisers? Aren’t some of their advisers also shareholders who were offered take over terms to churn their Comminsure books over to Clearview? Spare me Swanson…
Mr Swanson is as conflicted in his comments as the FSC are in theirs
The FSC are all about promoting the big end of Town, buying-off the adviser associations making false claims to Government about LIF, narrowing APLs and shafting advisers. We need to relentless keep pointing this out to Government to expose the problems they have created. Kudos to Simon Swanson for expose the FSC for the Cartel it is.
So Mr Swanson, you are here to save the client. Can you declare how you think your income may be impacted by what you are promoting, in the interest of dealing with COI. Is your product so superior no APL is complete without it? If Clearview dissappeared tomorrow, who would be worse off really? Other than Mr Swanson. It is not all about you Simon.
[b]Clearview should take a stand an offer 1 year responsibility on all new contracts from Jan 1st and tell the government that that is how there company will operate, that will show the FSC and its Bank buddies who will be an independent operator.[/b]
Swanson is right.
Every time one of these bodies releases their instructive demands from the industry, all of the sheep stand up and say: “We applaud what the Lord says”.