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.”
Great work LICG it is good that advisers are being represented in this debacle
The FSC are only concerned with churning as they are the representative body of the Life Companies. If they were serious about getting rid of churning the first thing they would do is ban takeover terms. They would then look at their bigger writers and track their application history. How many advisers place the same clients business with a Life Company on a two-year rolling basis? If they know this refuse their business, or at least refuse to pay them more than renewal commission for it.
How ludicrous! If 20% of the 23,300 licensed advisers regularly write risk statements of advice & wrote 1 risk SoA per week, they would produce 233,000 SoA per annum. ASIC sampled 79 (targeted) advisers. The FSC act. If I want a fact free argument I will just ask a politician. What is it with the FSC? Am I being too harsh? Perhaps for the FSC it is not just a vision of the new world they want to see but also a very flattering vision of themselves trying to rescue the exploited, create ‘social justice’ and be on the side of the angels?