Speaking in the House of Representatives, Ms O’Dwyer introduced the bill to amend the Corporations Act 2001 which, she said, “will better align the interests of financial advisers who sell life insurance products to their consumers”.
While addressing the House, Ms O’Dwyer said she wanted to “publicly acknowledge and thank” the financial services industry for its “constructive engagement”.
“I want to specifically acknowledge the work of the AFA, the FPA and the FSC in working together to achieve sensible reforms for the sector which will benefit consumers through the provision of more appropriate advice and long-term sustainability of the industry,” she said.
“ASIC identified a strong correlation between high upfront commissions in the sector and poor consumer outcomes, including high lapse rates where consumers are churned through products.
“It also found unacceptable levels of poor quality advice – in particular, 45 per cent of cases reviewed [which] involved high upfront commissions failed to meet the relevant standard for financial advice. This is unacceptably high,” Ms O’Dwyer said.
“Rather than acting unilaterally, the government asked industry to respond to ASIC’s review so that any reforms were driven by industry itself,” she added.
The bill is now scheduled for further debate during the next sitting of Parliament.
ifa reported on Wednesday that the controversial legislation was to be introduced this week.
Unfortunately we have the direct insurance where a claim is six times more likely to be declined. The government is debating the wrong issue.
Where are the comments and voices from the AFA and FPA at this time? Speak now and help us understand why kelly has made these comments
Who needs a Labor Gov and the ISA to erode adviser numbers when the Lib’s are doing it for them? This bill will go through with no opposition at all to our detriment.
Yes it may line the pockets of the institutions in the short term but ultimately if there is less of a distribution force (and there will be as advisers exit) then ultimately the ISA ends up majorly benefiting.
Thanks Lib’s, to use the Patriot’s analogy, in war time the friendly fire was just as deadly as the enemy’s.
Ok so we are in one accord as small business advisers….how do we really make a change for the better when our industry bodies are so deluded or what, scared? to go against the push by the gov, FSC etc??? We need a really cohesive push to our Fed and State MP’s and Senators to get this exposed for what it is and then quash the bill. Sadly, though, there are too many deaf ears or just plain lazy ones. Remember, millions accepted slaughter in wars rather than rebel and take on the bullies.
I wonder how pleased the FPA, AFA and FSC are to be dragged into bed with this useless politician and been set up to share the blame when the outcomes of this bad policy are realised by the life companies.
Congratulations AFA.
You keep protesting that you were not in agreement with the insto funded FSC push to fundamentally erode consumer advice and choice. However the Parliament has now acknowledged your assistance in making it happen. Are going to correct Hansard?
Ms O’Dwyer, [b]the minister for Financial Institutions[/b] has colluded with her FSC institutional buddies to completely screw the small business advisers.
O’Dwyer and the Liberal party should be ashamed of the blatant transfer of even more power to the large banking and insurance institutions that will no doubt line their pockets with more profit at the expense of advisers and consumers.
O’Dwyer and the FSC are close to pulling off a major con job on a “Churning” issue that has never, ever been statistically tabled to any extent that it exists industry wide because the insurance companies refuse to or are unable to produce the data.
O’Dwyer, please go back and work for NAB and stop pretending to be the minister for Small Business. Your twisting of the facts is beyond belief.
Agreed James…also the bill does nothing to stop another adviser from churning your business inappropriately and when they do they win and you are the one who receives the claw-back…that’s sensible…NOT! The whole thing has been a greedy exercise orchestrated by the greedy top-end…shame on the Life Companies. Bill Shorten should escape a mention…his careless My Super Reforms have played right into the hands of the Life Companies and Banks also. Maybe with time the worm will turn another for the Advisers to feel like they are not being unfairly targeted and supported by those who we have built businesses for.
What a load of unmitigated spin .
sack this head in the sand minister now, before she does anymore damage. To “Paraphrase” Kerry Packer during the inquiry into media ownership. “You guys have passed maybe 10,000 laws since i was say 18 till now, and you know, i don’t think this country is any better for it”
Are you kidding ! This bill is all about price fixing of commission to the financial adviser . As opposed to the market dictating what the commission should be the FSC and the cohort it represents pushed for a lower commission rate . Please tell me are we living in a capitalist society or a capitalist society only when it suits