The AFA says it cannot give “complete support” to the findings of the Life Insurance and Advice Working Group (LIAWG) since the recommendations may push up the cost of insurance for consumers.
In a statement issued following the release of John Trowbridge’s report, the AFA – which was instrumental in the establishment of the LIAWG – said stakeholders should view the report with caution.
“Ideally this final report would have our complete support but unfortunately, in its current form, it does not,” said AFA chief executive Brad Fox.
“While acknowledging that there is a growing momentum from advisers towards fee for service, particularly for comprehensive financial advice, we believe Australians will pay more for life insurance advice if these recommendations are implemented.
“This is because advisers will need to charge their clients an additional fee in order to recover some of the costs of providing advice.”
Unless life insurance advice becomes less expensive to provide, or premiums are dropped, fewer Australians will be insured, Mr Fox warned.
At the same time, he said the AFA representatives on the LIAWG have “worked tirelessly” over recent months and that it was a “thorough process”.
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