Financial planning and risk advice are like “oil and water” and should revert to a pre-FSR separation, according to Synchron director Don Trapnell.
Speaking to ifa, Mr Trapnell said life risk and holistic financial planning advice are two “very different disciplines” and that the Financial Services Reform Act (FSR) created an “interesting conundrum”.
“One requires a very strong knowledge base in facts and figures whereas one requires a very strong knowledge base in emotions,” he said.
“When [the FSR] came into play, effectively life insurance and financial planning were brought under the same set of rules.
“I would dearly love to see a separation back to where we were prior to the FSR, effectively where we had registered life insurance brokers and licensed financial advisers.”
Before the FSR was introduced, a licensee could hold two authorities, as Synchron did, Mr Trapnell said.
“But that means that the product set and the education set and the skill set that is specific to a financial planner would be applied to that planner, and the product set and skill set and knowledge set applied to a risk adviser would be applied to that adviser,” he said.
“They are very much like oil and water; they are two very different disciplines.
The risk market makes up approximately 80 per cent of Synchron’s business, Mr Trapnell said
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