AFA chief executive Brad Fox says the association is “looking forward to advisers having greater certainty and are keen to see elements of the life insurance reform package progressing”.
Mr Fox said while remuneration is just one part of the life insurance reform package, it is a part that must not be underestimated, as changes to remuneration challenge business models and, in many cases, an adviser’s sense of identity.
“While most advisers understand that phased reductions in upfront remuneration from 2018 will be offset by higher ongoing remuneration, the change is still significant for many advisers,” he said.
“Advisers need to work together as professional peers to learn from each other’s experiences about how to embrace different remuneration models such as hybrid and level commissions and fees.
“For most advisers, transitioning successfully will bring increased practice valuations.”
On Wednesday, Minister for Revenue and Financial Services Kelly O’Dwyer said the changes to LIF will significantly reduce the incentive for advisers to churn clients between life insurance products where there is no consumer benefit.
“High upfront commissions have been identified as a significant cause of poor quality life insurance advice,” Ms O’Dwyer said.
“ASIC’s 2014 review found that in 45 per cent of cases involving high upfront commissions, the advice provided failed to meet the legal standard. This is unacceptably high.”
Not so sure about this !
LIF stuck in Senate till Feb
Cabinet reshuffle
Life companies leaving the FSC
Executive contracts up for review
Plenty of water to flow under this bridge yet !
Of course it will have a clear path. There was no fight put up by our fearless leaders in the AFA or FPA who think more about their FSC sponsors than their members or customers.