Insurance reforms ‘reek’ of insto manipulation: AIOFP

The Association of Independently Owned Financial Professionals (AIOFP) has lambasted the FSC and the FPA for their role in the proposed life insurance industry reforms, claiming their objectives were conflicted due to ties with the institutions.

In a strongly worded letter to members, AIOFP executive director Peter Johnston said he will be asking Assistant Treasurer Josh Frydenberg to consider an alternative solution in which all stakeholders are considered.

"This proposal reeks of institutional manipulation by associations that are heavily influenced by institutional presence in their membership and executives," Mr Johnston said.

"The AIOFP will argue that the FSC and FPA executives are too heavily involved with potentially conflicting institutional membership relationships and are too far removed from operating an advice practice to offer a pragmatic workable solution.

"We can no longer rely upon associations to stand up for the advisory industry if they are held captive by the Institutions," he said.

Mr Johnston also said the proposals are a "typical institutional centric approach" that fails to address a number of challenges for small business owners.

"[For example,] product failure and the injustice imposed on advisers: this issue has been spun and twisted to emerge as an adviser-driven problem and the Institutions are innocent manipulated bystanders," he said.

In the suggestions which the AIOFP will put to Mr Frydenberg, the association will be looking to lock in benefits for consumers and to create a commercial environment so that "advisers can survive".

Members of the AIOFP are encouraged to submit their thoughts by 11 July, before the association takes its suggestions to Mr Frydenberg.

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