Minister O’Dwyer told ifa that she “hoped” the reforms would be introduced into the House of Representatives this week, before being referred to the Senate Economics Committee.
“Legislation is expected to be introduced into Parliament this week,” she said. “The government, with the agreement of industry, is striking the right balance for advisers and consumers.”
Minister O’Dwyer emphasised there was agreement from stakeholders for the reforms.
“Last year the industry reached agreement on the implementation of these important improvements,” she said.
In November last year the government released the final life insurance industry package, reducing the three-year clawback policy, but making no changes to commission rates.
In announcing the final details of the Life Insurance Framework, Ms O’Dwyer said, “The Government has responded to industry concerns about ongoing business viability by moving from a three to a two-year clawback period. However, through these reforms we are ensuring that we are addressing adviser incentives that encourage replacement of policies where there is no consumer benefit.”
The proposed reforms will come into effect on 1 July 2016, with transitional provisions until 30 June 2018.018.
Industry associations responded positively to the government’s release of the final life insurance reforms package last week, while others believe further reform will eventually be needed.
The AFA said that the refinements to the clawback provisions, which have been reduced to two years, will be “received with relief by their members”.
In December, the government released exposure draft legislation for industry consultation.
Kelly Odwyer Minster for Financial Institutions.
Odywer and the liberal party should Hang their heads in shame for handing more power, control and profit to the banking and insurance institutions at the expense of small businesses.
Odwyer clearly has conflicts of interest.
Ah Bento!,As ever, a very predictable response.
It seems bizzare that you are suggesting for me to “pipe down”, when your history of commentary over the last couple of years has taken every and any opportunity to consistently preach your evangelical sermon on how every adviser that doesn’t prescribe to your
.50% True Independents Club, is somehow delivering inferior advice.
The fact is that a majority of your True Independent disciples, once played for the other team and were remunerated via commission and asset based fees and probably provided high quality, compliant and appropriate advice in their clients best interest.
Now they have “seen the light”, everyone else (the other 99.5% of advisers) are doing it wrong.
No-one owes me a living Bento.
Do your clients who pay you for your advice owe you a living?…maybe so.
There is adequate space in the provision of advice for a range of advice cost models and the client should be provided with various options from which choose.
They deserve the right to choose the model that best suits them, not you?
Isn’t that right Bento?
Unfortunately, for members of your team with the blinkers on, it is “one way or no way” and in the end that just comes across as bigoted and elitist.
I do not have a low opinion of politicians Bento, but I do have very serious concerns as to how this process has been handled from the start and on the manipulation of inconclusive data that has been used to form the basis of wholesale change using the grossly incorrect deception of benefiting the consumer….to which the proposed framework most definitely will not.
Thanks for the advice Bento, but in this case it doesn’t represent value to me and so I won’t be proceeding with your recommendations.
Has Kelly O’Dwyer talked to any advisers? I haven’t met a single one who agrees with the reforms. I use level commissions only, so the reforms have little impact on me, but I can clearly see the long-term damage this will do. Why shift profit and power away from small business and over to the big institutions? They will use this to go direct and screw the public. They are already doing this. Have a look at the direct insurance policies for godsake. Some of them are obscene. The faceless executives have no morals. They never meet the clients. They don’t care about them. Meanwhile, those who are passionate about protecting families, who meet with clients in their homes and provide good advice are getting shafted. What a sick joke!
Absolute rubbish. She is well and truly in the pocket of the big banks
Craig Yates, for someone with such a low opinion of insurance companies and politicians, why do you keep campaigning for them to owe you a living? Pipe down, get independent, and use that energy to promote the benefits of good advice!
AFA and FPA – hang your heads in shame for selling us all down the river. Your agreement, on behalf of your members, has given Ms O’Dwyer the ‘stakeholder’ argument and enabled her to push through reforms that will see the collapse of insurance advice and the exacerbation of the underinsurance problem in Australia.
As Minister for Small Business, Kelly O’Dwyer has an inherent responsibility to ensure the market and economic power of large business is not misused and manipulated for the purpose of gaining a commercial and competitive advantage to the detriment of small business.
The effects test and current assessment of competition policy should be applied to the current environment that exists in the financial services area.
It is widely known that many members of the FSC provided submissions that would have wholly supported the abolition of commissions payable for Life Insurance advice or had them reduced to a maximum level of only 20%.
When many of these organisations are the same product providers to the independent financial services small businesses and yet are also the competition in the form of selling Life Insurance direct to the public, their agenda of pushing to have the commission base eliminated or significantly reduced, is clearly a cost cutting measure designed to maximise profit at the expense of small business that does not and never will have the financial marketing power to compete.
Therefore, if many small businesses in the financial services area are unable to continue and must exit, this immediately provides less competition for the large corporate financial services companies who will then reap financial reward from increasing the volume of their direct insurance products.
Unfortunately,as Kelly O’Dwyer is an ex-NAB executive, it is likely this primary responsibility she has for the financial health of small business in the financial services sector will be overlooked and dodged as her next position following politics may well be back in that space.
It would be entirely foolish to jeopardise a future opportunity for the sake of 1000’s of small businesses,the staff they employ and the clients they provide advice to.
Thank you AFA and FPA I see your industry agreement as mentioned in the article has been successful in the implementation of this bill they are to legislate, see paragraph below, All Advisers this is what you pay these idiots for its time everyone woke up and cancelled there memberships like I have.
Legislation is expected to be introduced into Parliament this week,” she said. “The government, with the agreement of industry, is striking the right balance for advisers and consumers.”
Minister O’Dwyer emphasised there was agreement from stakeholders for the reforms.
“Last year the industry reached agreement on the implementation of these important improvements,” she said.
I’m a Stake holder and I violently disagree with the so called reforms, how is that BS allowed to continue?