AFA, FPA welcome final LIF, FSC believes in further reform
Industry associations have responded positively to the government's release of the final life insurance reforms package last week, while others believe further reform will eventually be needed.
The AFA has said that the refinements to the clawback provisions, which have been reduced to two years, will be "received with relief by their members".
"In an electronic poll held at our recent National Adviser Conference in Cairns, our members indicated almost unanimously that three-year clawback was the greatest issue in the reforms," said AFA national president Deborah Kent in a statement.
"That was consistent with the view of our board. To succeed in having this reduced to two years is a great relief to our members, particularly those that own and operate small businesses."
Also welcoming the government's announcement is the FPA, which said in a statement that it commended Assistant Treasurer and Minister for Small Business Kelly O'Dwyer for consulting and listening to the profession and addressing the industry's concerns, which derived from the earlier LIF announcement in June.
"The FPA supports the need for a model that enables financial planners an appropriate amount of time to transition. We believe that the staged approach to the new commission structure achieves this," said FPA chief executive, Mark Rantall.
"The FPA also believes that expanding education, strengthening enforcement and removing other conflicted payments, including volume rebates and payments, is necessary to the overall package of initiatives."
Meanwhile, the Financial Services Council (FSC) has said it welcomes the reforms and an ASIC review in two years. However, it believes more refinement will be needed in the longer term to improve consumer outcomes.
"If consumer outcomes do not improve, the government has given a clear commitment to implement the Financial System Inquiry's recommendation of a level commission model in 2018," said FSC director of policy, Andrew Bragg.
"As the financial advice profession matures, we expect all financial advisers to move to a fee-for-service model."
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