ClearView says the FSC draft standard released last week does not provide guidance on how broad that “range” should be, and mirrors the current situation where large institutionally-owned licensees can use their discretion to enforce extremely narrow and restrictive APLs.
The draft also ignores the contentious issue of shelf space fees and shuns the Trowbridge report’s recommendation that APLs should include at least half of all life insurers, the firm said in a statement.
ClearView also said the draft imposes only two key requirements on Australian Financial Services (AFS) licensees – to apply a reasonable basis to APL construction with a “range” of insurers and to have a process for “off-APL recommendations”.
ClearView managing director Simon Swanson said the draft standard confirms that the industry cannot self-regulate and will achieve nothing in terms of increasing competition, choice and customer best interest, describing the draft as a Yes Minister document.
“Despite being charged by the government 18 months ago to develop a new APL standard for the delivery of greater product choice and accessibility for advisers, the FSC has produced a superficial document that will fail to stamp out anti-competitive practices by the large vertically-integrated institutions and, therefore, won’t lead to profound, lasting change and a better deal for consumers,” Mr Swanson said.
“Open APLs are essential if advisers are to provide objective advice in the client’s best interest. However, the FSC’s dependent relationship with the dominant, vertically-integrated players means that there will be no meaningful progress in the absence of regulatory action.”
ClearView said it will continue to petition the government for mandated open life insurance APLs for all licensees, and is currently preparing a formal submission in response to the FSC draft standard.
it’s a real slight on this industry when a guy comes out and states that payments that have the potential to influence an adviser should be banned, and so many kick him down. Forget this my dealer group is so large you’re paying for shelf space argument, that’s just crap. If you want to provide advice and for once deflect the corruptness away from individual advisers we should be applauding this guy. Lack of action will result in over regulation.
There are legitimate reasons to not use a Retail Insurer that has not been around for long, and has had multiple ownership changes in a short space of time. There’s no slight in that all.
Agree with C’mon Fess Up and Chris B. Mr Swanson criticise APLs and other Life Insurers when his own FSG refers to preferred products and advisers receiving incentives in those products. Talking about stability and APLs, how long has Clearview been in Retail Life for? (A young insurance book naturally has lower claims/higher profitability ratio). Also, how many ownership changes at Clearview since 2009? The ownership stake by Sony which Anonymous refers to is a minority stake for now, the majority still remains with private equity. Watch private equity sell their share off as the unemployment rate rises (strong correlation to TPD and IP claims – this is what hit profitability at MLC / AMP the last few years with their older insurance books). Finally, no, I am not connected to any Life Insurer or Reinsurer, just an interested observer.
No just pointing out that if you hold yourself up as a pillar, your own back yard needs to be in order. No mud throwing here only reading the FSG !
Mr Swanson from your comments it is obvious that you are trying to get Clearview onto more APLs
Fix your security rating and you might find more licensees will look at you.
I personally would not entertain Clearview for risk products as I am wary of what its future holds for my clients – acting in their best interest.
It’s future was secure enough for Sony Life to buy a stake in it
Isn’t the financial security of insurance companies regulated by APRA ? They’re rated pretty highly on my system. Oh wait. Perhaps Chris, it’s a dealer group rated system with some dealer group intervention in there. Pay me $400K and I can make a lot of things look poor as well.
Lifted this from Matrix FSG – Matrix Planning Solutions Limited is wholly owned by ClearView Wealth Ltd (ClearView) (ACN 106 248 248)(OK now direct from the FSG) – A number of these platforms were deemed to be ‘preferred’ (mmm what does this mean?) A Licensee Fee will generally apply for clients who elect (clients now elect? ) to use preferred platforms. The Licensee Fee may be up to 0.25% p.a. of your total investment under the platform. Matrix Advisers may receive shares in ClearView as a result of ClearView purchasing Matrix. Advisers may hold ClearView shares through this arrangement (mmm no vertical integration here at all !!) Matrix has arrangements with certain external parties under which it receives commission and other payments (mmm other payments?) (Sounds like some work to do at home first !!!!!!! )
So do you agree that the FSC recommendations are unacceptable or are you just trying to throw as much mud around as possible in the hope that we all ignore the underlying issue. Which company do you work for?