Speaking at the FSC and BT’s Political Series breakfast this morning, Ms O’Dwyer outlined the actions the federal government will be taking through its financial system program, in response to the recommendations of the Financial System Inquiry.
As part of the government’s program, Ms O’Dwyer said, the LIF will play a key role in improving the financial services sector.
“We’ve also been working with the industry to develop measures to improve remuneration practices in the life insurance sector,” Ms O’Dwyer said.
“As part of our financial system program we have adopted the final industry reform proposal I announced earlier this month to improve the long-term sustainability of the sector, while at the same time better aligning the interests of advisers, insurers and consumers.”
Ms O’Dwyer also said the government’s financial system program will commit to raising the professional, ethical and education standards for financial advisers.
“Subject to transitional arrangements advisers will be required to hold a degree, pass an exam, undertake continuous professional education, subscribe to a code of ethics and undertake a professional year before they can advise clients,” she said.
“These higher standards will place financial advice on a similar footing to other professions and in doing so increase consumer confidence and trust in the sector.”
Ms O’Dwyer said that, overall, the government’s financial system program will set out a “blueprint” for how Australia will respond to the “challenges and opportunities” the industry is set to face in coming years.
Kelly it is Unfortunate that you have been in the job 2 minutes and had to deal with the LIF, but what would be more unfortunate is to get cosy with the FSC which has its own agenda and has nothing to do with benefiting the client,
We the independent advisers have been and will always be the back bone of the Australian risk insurance industry offering our services 24/7 across the board for all who need our help, don’t let the FSC destroy this as there is so many valuable risk specialists like myself that will consider leaving the industry because of our 50% commission reduction, plus extra costs for more education and longer responsibility periods, Think before the Liberal government does the complete opposite to what Malcolm and you have BEEN spruiking about More jobs and looking after small business 1 term governments are not what Malcolm wants.,
I have emailed a letter to Kelly O’Dwyer quoting the below and urging her to actually listed to coal face advisers and not the vested interest drivel from the other parties. A pro-forma reply so far but a promise of a response. It took around 2mths to get a response from the other guy. we do need to unite as Advisers to counter the big guys and cause pollies to realise that there are enough of us to cause electoral change. Knock on the door of your local & fed MP and give them the real deal and tell them that a passing of the LIF legislation will be a loss of a vote for them personally.
Minister please understand that the “Sustainability” word that you use constantly actually means in this context “improving the bottom line of FSC members at the expense of Small Business” of which you are the minister. It is a deplorable state of affairs that has happened on your “watch” minister. You or anyone from the FSC can still not articulate what the “Substantial Consumer Benefits” will be under the LIF. Its a simple question.
Better aligning the interests of large businesses with their shareholders is the current outcome Kelly. Clients will lose.
And you are the Minister for small business…?
Kelly can you please make yourself urgently visible to the many non bank owned small business advisers such as Roger Smith who are currently the losers along with clients with LIF as it currently stands. Many small business financial advisers will cease writing new risk business post 1/7/16 so please let us know exactly how that group and the many unadvised clients in the future will have “better aligned interests”?
The FSC is made up of large business insurance companies who are owned by shareholders so is it any wonder why small business owned advice practices are the ones questioning your agenda when you appear at an FSC breakfast being run in conjunction with the Westpac owned BT?
I am an FPA and an AFA member and could not disagree more with what they “negotiated” with LIF on my behalf…
Geez, it’d be nice to see the Government raising “the professional, ethical and education standards” of the product provider’s. Haven’t they been instrumental in the system getting to this point through their cannabalistic marketing programs designed to take clients off other providers? One insurance BDM admitted to me recently that roughly half their ‘new’ business comes from re-writing existing policies.
But I guess the Government is happy to dismiss these sorts of concerns as valid marketing strategies by the insurance providers – whereas an adviser would be labelled a ‘churner’ doing exactly the same thing.
Fantastic to see the double standards have been equally applied by the relevant minister of the day – regardless of political persuasion.
It’s great to see that Ms O’Dwyer addressed a “friendly” audience – one which was unlikely to “inform” the Minister that the “FINAL LIF” will do nothing to ensure enhanced “client best interests”. The provision of advice post 1 July 2016 in the Risk Insurance market will at best be mediocre, as those who have the knowledge skills and expertise to provide the Professional advice will not advise “new clients” under the terms proposed. This massive loss of talent will be irreplaceable The commission reduction is far greater than the 50% reported. When you factor in the “ceilings” on individual policy commissions the impact on larger premiums could well be a reduction of 70 – 80%.
No one has an issue with ongoing professional education and a code of practice. The existing structure though requires at least an Advanced Diploma plus ongoing education of 30 CPD points PLUS TASA 20 CPD points. This is in itself quite an onerous time commitment in addition to Professional Development days etc.the accountants I talk to do not have to commit to the same level of education.
Ms O’Dwyer, I have already extended an invitation to you to sit down with me and hear the TRUE story of our Industry. The pathway you are being “guided” along is in NO ONES BEST INTERESTS because the impact in the risk advice sector will be significant and irreversible.
The loss of Small Business entities based on poor legislation is unforgivable and the loss of the claim proceeds which currently save the Federal Government probably hundreds of millions of dollars a year equates to another PINK BATT SCANDAL.
The future of our Profession is in your hands and I would implore you to treat it with the respect that it deserves.
So, the minister for Small Business is busy pushing the big business (FSC) line!!
It is simply beyond comprehension that Kelly O’Dwyer understands so little in respect to this matter as she continues to parrot the same line as the FSC has been spinning out in that the consumer will be a beneficiary of these changes.
In “aligning the interests of the consumer”, could we please have a detailed summary of exactly how the consumer will benefit? Is it just a case whereby the Govt and the FSC can just say “stuff ” without the need for any documented assessment, projections and specific detail as to how this will apply and actually benefit the consumer.?
Some insurers in the last few days have only started discussing the idea of not increasing premiums within the 2 year clawback timeframe, but this is only a result of the continued pressure and commentary from advisers regarding this matter and the implications. This effectively has been forced to be discussed and was never going to be a voluntary suggestion from the insurers in relation to a consumer benefit.
This is an attempt at a trust rebuilding exercise between insurers and advisers which has been unfathomably damaged.
The O’Dwyer quote should have read……..” will align the interests of the Govt, ASIC and the FSC”.
It is a game of smoke and mirrors….no more, no less.
Ever since these measures were first announced, all that has occurred is that there has been debate over the quantum and timing of the measures. Nobody has bothered to ask just what problem the government is trying to solve. I’m struggling to see a win in this for advisers. If you don’t already use hybrid commission models, you wouldn’t view a compulsion to do so as a plus. As for the consumer, what’s the win in this for them? They are now likely to have to pay fees for insurance advice. They’re not likely to see that as “winning”. So, who’s left? Ah, the insurers! Will they see this as a win? Let’s see……… lower costs to obtain business, extended write-back provisions, the imposition of “cartel” remuneration practices. You BET they’ll see this as a “win”! How nice of the federal government to legislate such generous commercial advantages to one of the country’s biggest industries.