Should recommendations in the Trowbridge report be implemented, small business financial advice firms will be forced to “shed staff” and cut costs to survive, argues Synchron director Don Trapnell.
Responding to the recommendations of the Trowbridge report, Mr Trapnell said that as they currently stand, the recommendations will be detrimental to small advice practices, which is of great concern to his dealer group.
“The report suggests that businesses will recoup losses in a few years’ time. Small businesses simply cannot withstand losses for that period of time and would be forced to shed staff and cut costs simply to survive,” Mr Trapnell said.
“If the recommendations are implemented, we estimate that job losses, both direct and indirect, suffered by Synchron practices alone would number around 500 people,” he said.
Mr Trapnell pointed out that now the report has been released, a strict modelling process should be undertaken to demonstrate to the government and regulators the real effect the reforms will have on consumers, advisers and small businesses.
“We believe the report missed a golden opportunity to conduct this modeling before handing down the recommendations,” Mr Trapnell said.
“The report marks a starting point; however, before we knee-jerk to implement such wholesale changes, we must ensure they actually do benefit consumers and are meaningful.”
Mr Trapnell added there is an opportunity for insurers to innovate on the products they offer.
“We now have an ageing population, and we see government suggesting we may need to be working longer – unfortunately, and to the detriment of consumers, many products available just do not suit the changing lifestyles of Australians in their current form,” Mr Trapnell said.
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