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FPA, AFA respond to misrepresentation claims

The FPA and AFA have responded to accusations that they misrepresented advisers during the life insurance reform process, saying their members are satisfied with their advocacy work.

Both the AIOFP and commenters on the ifa website previously voiced concerns that the two industry associations ignored advisers' views regarding the Life Insurance Framework (LIF).

However, speaking to ifa, AFA chief executive Brad Fox said the group received "resounding support" from its members, who also understood "the advocacy work done by the AFA on their behalf".

"Since the LIF began, the AFA membership has continued to grow consistently and, importantly, this is at a time when membership of a professional association is not a legislative requirement," he told ifa. 

"Specifically in regard to LIF, our Life Insurance Roadshow in September last year achieved a 96 per cent positive rating from attendees [who said] they felt more confident after attending the event."

FPA policy manager Ben Marshan also said member satisfaction has been on an upwards trend for his association. He said the FPA had fought against the original LIF proposals because they were not workable for advisers.

"We helped make sure that the approach was pragmatic," he said.


"Our view is that, compared to what the original proposals were, what we've got to is a much more pragmatic position for financial planners [that] allows them and their businesses to transition."

But not everyone agrees the latest LIF version is workable.

Mark Dunsford, director of NOW Financial Group, said the AFA had "driven advisers under a bus".

In a statement directed at the AFA, Mr Dunsford said: "We all feel you have allowed the execs of the life companies and banks via the FSC to frame incorrect arguments blaming advisers unfairly for problems life insurance companies have created."

He continued: "Do you understand that the LIF in its current format will ruin hundreds of small businesses, increase the under insurance issue, increase the burden on our social security system, increase the cost of advice?

"The only winners are the product manufacturers. Yes, the banks and insurance companies, who surprisingly have framed an argument via the FSC to benefit only them."

Last month, the Senate Economics Legislation Committee recommended that the LIF legislation be passed without any changes. The government released draft remuneration regulations that will support the reform package last week.