The government’s mandatory professional standards regime is “over-prescriptive” and might worsen the Australian underinsurance problem, says a non-bank dealer group.
Synchron director Don Trapnell has issued a statement calling out the federal government for adopting an approach to financial advice that will result in “over-education” and “over-regulation”.
Citing research conducted by ifa suggesting that as much as 75 per cent of the industry may seek to exit ahead of the introduction of the new standards, Mr Trapnell said this outcome would not be in the public interest and that life insurance specialists will be the largest casualty.
“A mass retirement date for life insurance advisers is looming and that date is 31 December 2023,” Mr Trapnell said.
“We believe the government is trying to force life advisers, who are engaged in helping people to make simple, yet life-changing decisions around protecting themselves and their families, to become full service financial planners.
“The pendulum has swung too far the wrong way.”
Risk advisers do not need to be across retirement strategies, “the intricacies of managed funds” or the “latest superannuation caps legislation”, he said.
He called on the government to take various financial advice specialisations into account when determining standards.
Synchron has previously called for a separate licensing regime for life insurance advisers.
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