Insurance proposal will have adviser support: AIOFP

The AIOFP board plans to complete a submission to Assistant Treasurer Josh Frydenberg on the life insurance industry reforms by the end of this week, with its proposals already gaining the support of some independent senators.

"Like some aspects of FOFA and product failure, the advisers have been blamed for the shortcomings of other market stakeholders. This is yet another lesson to the independent sector that we cannot afford to allow these institutionally-aligned/sympathising associations to represent us with the regulators or government," AIOFP executive director Peter Johnston said.

Mr Johnston said further that he had contacted some key independent senators about supporting the suggested amendments, with senior Liberal MPs expressing concern that advisers were not fully consulted.

In an email to AIOFP members – and following a previous email last week – Mr Johnston said the proposal the association is presenting will have the blessing of advisers before it is taken to Mr Frydenberg.


Mr Johnston emphasised this is something the proposal agreed to by other associations did not have.

"We will distribute it to all members. This is in contrast to the FSC, FPA and the AFA submissions which have yet to see the light of day to the best of our knowledge," he said.

"What has become painfully obvious is that the proposal could not have been constructed in serious consultation with any advisers, no one regardless of their market origin would have agreed to the changes."

Responding to Mr Johnston, AFA chief executive Brad fox told ifa it is "very easy to criticise the AFA and FPA for being involved" in the process.

"The fact that the AFA and the FPA could come up with a joint, shared, identical blueprint that was taken to the FSC and to [Mr Frydenberg] helped enormously in getting that final outcome," he said.

"Things were considerably worse before that, so by us coming together, united, was a very beneficial part of this process."

Mr Johnston said the three associations may have "superficially consulted" advisers but added that this did not go far enough.

"All they have done is insulted them with draconian institutionally-focused amendments, with little regard for consumers or advisers," he said.

Mr Fox also acknowledged that had the AIOFP joined the AFA and the FPA in its discussions it would have helped the cause.

"The more voices you have uniting behind one point the better the result," he said.

"We have seen through the last five years with FOFA that the advice market has been divided and others have been able to divide us on points which ultimately include outcomes that we aren't particularly satisfied on.

"The more we can be united on things that have the greater good at the heart of the outcomes – so in other words, the consumer needs to benefit – well, then the advice benefits and then the providers of advice benefit," Mr Fox said.

The FPA and FSC were unavailable for comment.

Insurance proposal will have adviser support: AIOFP
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