Advisers call on new PM to review LIF
The survival and growth of the non-aligned financial sector and a review of the proposed life insurance reforms must be a priority of Prime Minister Malcolm Turnbull, says the managing director of non-aligned dealer group Sentry.
Sentry's Murray Hills said that dealer groups and industry stakeholders plan to call on Mr Turnbull to revise the proposed changes to the retail life insurance industry which were released in June.
He said that Sentry advisers would also join with the principal of Sentry-aligned practice Cost Benefit Analysis, Roger Smith.
"I have said on many occasions that most consumers understand and are aware how complex the financial world has become and for the need to seek the guidance of qualified financial specialists to provide them with value-for-money personal advice and peace of mind with strategies that safeguard their personal, retirement and wealth creation aspirations," Mr Hills said.
Mr Hills reiterated concerns that the three-year responsibility period was "unworkable".
"The proposed changes have quite literally rocked the foundations of the advice industry, which is comprised of thousands of small business owners, to such an extent that the sector is now fragmented and in my view in danger of imploding," Mr Smith said.
Speaking to ifa, AFA chief executive Brad Fox said that if Mr Turnbull were to reshuffle his cabinet and replace Assistant Treasurer Josh Frydenberg, this could prolong the government's response to ASIC Report 413.
"It is reasonable to expect that [if Mr Frydenberg was replaced it] may take longer to resolve the government’s response to ASIC Report 413, and Recommendation 24 from the Financial System Inquiry referring only to level commissions, as any new Minister would need to be brought up to speed," he said.
At the same time, AIOFP executive director Peter Johnston said the leadership change could be a boon for the industry's attempts to stave off the life insurance reforms.
"With a national election only 12 or so months away and the Coalition's need to improve their standing in the polls, they will have little choice but to act in the best interests of consumers, the nation's underinsurance dilemma and start listening to small business," Mr Johnston said in an email to association members.
Mr Johnston had contacted the AFA and FPA to see if they would be prepared to meet to place pressure on the government.
Other industry associations were also hopeful that Mr Turnbull's leadership would assist the wealth industry.
FPA chief executive Mark Rantall said the leadership change may have an "effect on some very important reform announcements".
Specifically, these include "in relation to FSI, the PJC Recommendations for financial adviser education, professional standards and ethics and the Life Insurance Framework that were imminent", he said.
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