In a statement, the LICG said the FSC appears to have designed reforms around the LIF that address only the problem of churning and almost nothing else.
“Their commentary constantly points to a proposition of ‘churn’, not concern about quality of advice on any other basis, not industry sustainability, not the systemic poor institutional culture […] and not professional education standards,” the statement said.
“The FSC feel they are justified to tarnish and punish all 23,300 advisers licensed to provide personal insurance advice because of ASIC findings based on 37 per cent of 79 targeted advisers.
“Worse, in their proposed LIF reforms, members of the FSC seek to reduce adviser remuneration to a point where, unless the client’s premium is more than $5,000 per annum, it will not even recover adviser costs,” LICG said.
The LICG also claims the FSC did not look for, or measure, any concerns other than churning when it assisted ASIC in phase one of its review of retail life insurance advice.
“It would appear the ASIC didn’t ask anyone but members of the FSC to assist in phase one when they were designing their research project,” the statement said.
“The FSC are looking to ASIC to substantiate their churn problem to justify their reform measures in 2018, after the reforms are to be introduced.”
Well done to the LICG and the fantastic work they are doing.
The way the whole LIF saga has played out is a disgrace and a betrayal to the thousands of risk advisers who have helped build the existing insurance company books of business.
The FSC is all about increased profits. They don’t care about the consumer and to hell with the long term viability of the personal risk advice industry.
I get the feeling that finally the LICG is gaining traction and the silence from the FSC to respond to multiple requests from the LICG for proof consumers will be better of is deafening.
There is no doubt that there are differing opinions within the FSC with Zurich in particular being extremely supportive of the thousands of risk advisers and options on how we should be able to be paid for the benefit of consumers and also small businesses.
Hopefully the traction I believe we are gaining will have an impact on the legislation being reintroduced and passed in its current form.
given these very FSC institutions actively seek to and help churn books TO them, surely they are the ones who should be held responsible as well as the easy target adviser? Maybe a PROPER investigation into the actions of the institutions would prove more beneficial, of course it will never happen, because our AFA and FPA have already rolled over for their paymasters.
We could also ask what the members of the FSC, pushing the LIF agenda believe are the benefits to consumers? I doubt there will be a response. The FSC speak it tends to use politispeak (politicians calling something by another name to reduce its impact; to make it misleading), such as ‘designed to improve the quality of advice’, ‘designed to address key issues’ & ‘better align interests across the life insurance sector’. I haven’t read anything from the FSC about why a consumer will benefit? Will they pay less, the same or more for advice? Will consumers be able to trust direct channels more post LIF? Will premiums reduce? I won’t hold my breath.