Advisers urged to keep up life/risk fight: AIOFP
The proposed Life Insurance Framework (LIF) is not 'set in stone', with the executive director of the AIOFP calling for advisers to continue to fight for amendments.
In an email to AIOFP members, Peter Johnston said that after recent discussions with an "informed government source" there is still room for negotiations since the provisions must still be approved by cabinet and the Senate.
At the same time, Mr Johnston reiterated his concerns over the negotiations between the AFA, the FPA and the FSC and the proposal the industry bodies submitted to Assistant Treasurer Josh Frydenberg.
He told AIOFP members that the proposal put forward was not amended by the minister's department.
"We have been informed from a reliable source that the Minister's press release on June 25th outlining the 60 per cent upfront, 10 per cent ongoing and three year clawback provision is precisely what the three institutionally-aligned associations recommended to the Minister," he wrote in the email.
"This revelation demonstrates that the submission was structured to suit the best interests of Institutions, not the advisers and severely questions the future role of the FPA and AFA to represent the best interests of the advice community with Government and Regulators."
"The continual refusal by these three institutionally aligned associations to release the ministerial submission and its content to members only strengthens this view and suspicion about their intentions and behaviour."
The AFA, FSC and FPA have not publicly released their proposal, despite pressure from members and the adviser community.
Mr Johnston also raised concerns that the LIF proposal has ignored the desires of FPA members, particularly with regard to the controversial clawback provisions.
"The FSC can be excused as they are the Institutions' lobby group and must act in their members' best interests," he wrote.
"However, the FPA approach to this matter is confusing at best. By their own admission they sought feedback from over 1,000 advisers with a 70 per cent bias towards a 60 – 80 per cent upfront commission structure, 20 per cent ongoing and a two year claw back period but chose to materially change this structure with a submission to the Minister without including these critical findings from their adviser members.
"To then claim in the submission that they sought adviser members' views is disappointing and can only give the minister an incorrect perspective of what the adviser community really wants."
Mr Johnston told AIOFP members that he would be writing to the Minister to saying that the associations' LIF proposals do not "necessarily represent the views of the majority of advisers".
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