Some in the advice community remain dissastisfied with the imposition of the two-year clawback period from 1 July 2016, with one dealer group exec saying two years is still an "unacceptably long time".
Sentry's national life risk manager, Danny Maher, told ifa that while the government's announcement that a clawback policy will be enforced over two years instead of three represents "a step in the right direction", it still exposes advisers to many potential liabilities.
"This is still an unacceptably long time not to be sure of one's revenue earned for services provided up to 24 months earlier," Mr Maher said.
"It would be hard to imagine an individual employed as a salaried adviser agreeing to a clawback, even though the sales process, the SOA, ongoing service and the commission paid by the insurer to his/her employer is exactly the same.
"[This is] hardly a level playing field for the self-employed and small business life risk specialists who are the champions of the life insurance industry," he said.
Executive director of GPS Wealth, Grahame Evans, said a two-year clawback period is better than three years, but stressed more clarification is still needed.
"It's a good step forward but the key additional issue here is what will be classified for clawback in the two-year period by the insurance companies," Mr Evans said.
Director of non-aligned licensee Now Financial Group and director of advice practice Dunsford Financial Planning Mark Dunsford stressed that a clawback period greater than 12 months will have adverse effects, both for small licensees and small business owners.
"The clawback policy in principle is wrong. It means that every financial planning business is going to have a contingent liability on their balance sheet ... it's just not sustainable," he said.
Peter Johnston, executive director of the Association of Independently Owned Financial Professionals, said Assistant Treasurer and Minister for Small Business Kelly O'Dwyer's decision to amend the clawback policy was a "positive step" but was still "not enough".
"We will be continuing our 'behind the scenes' political campaign to get the other issues sorted," Mr Johnston wrote in an email to his members.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 21 Mar 2018Nick Hakes to depart AFABy Aleks Vickovich
- 21 Mar 2018Stockbrokers association launches education pathwayBy Staff Reporter
- 21 Mar 2018AFA to push for changes to FASEA guidanceBy Killian Plastow
- 21 Mar 2018Lonsec Research boss joins IOOFBy Staff Reporter
- 21 Mar 2018FASEA acknowledges reform ‘challenging’ advisersBy Killian Plastow
- 20 Mar 2018Product bias under royal commission microscopeBy Jessica Yun
- view all