In a statement today, Ms O’Dwyer said the changes follow ongoing consultation with stakeholders on the reforms.
The reforms now establish a “level playing field” by applying the requirements equally to all advisers regardless of employment arrangements.
“The revised regulations enable the reforms to apply to both advised and direct sales of life risk insurance products. This maintains the integrity of the reforms by ensuring they apply equally regardless of distribution channel,” the statement said.
Other changes include the commencement date of 1 January 2018 as well as the removal of transition arrangements that allowed commissions to be paid on stamp duty for one year only.
“The life insurance reforms form part of the government’s actions to build consumer confidence in the financial services sector through initiatives such as improving professional standards for financial advisers,” Minister O’Dwyer said.
“The government is consulting on revised regulations to ensure that these important reforms work as effectively and efficiently as possible.”
Submissions for the revised legislation close on 4 November 2016.
She obviously didn’t grasp why her once grand liberal party is failing, it’s lead shattered.
Today MLC has announce they will be increasing their direct insurance (through NAB) Kelly O’Dwyer and this is a perfect example of what the LIF will and has achieved.
If you would care to do a quote on NAB Essential Life and for a Life insurance for a 45 year old male non smoker for $500,000 the premium is $85.85 per month.
An ADVISER using MLC retail would get the same cover for the same client for $39.43 per month (less than half the cost!!). Not only has the adviser saved half the cost but it was done so on FULL COMMISSION.
The NAB Essential cover is basic underwriting with high exclusions and obviously no advice around Life TPD, Trauma or IP which the client may need.
The issue of course is if the customer is take the same position post LIF and the adviser has to charge say $1000 for providing risk advice and all of a sudden the customer has no choice but to go direct and pay double for a junk policy and they will be offered no advice on other products or have a safe policy.
This is exactly why the FSC want advisers out of the way.
Your LIF has completely stitched up customers as well as advisers and a Royal Commission will be the end result of your “reforms” in the future.
Odwyer, the Minister for Financial Institutions and the FSC strikes again.
Please go back and work directly for NAB, rather than pretend to be a politician.
Just a thought from another adviser. Lets say a retail advised policy costs $100. And a direct policy costs $110. Surely you can explain to your client the benefit of paying the same first year premium via an advised policy for superior cover having selected a policy / company that provides the benefits relevant to the client at a more competitive price.
To clarify. Mr client, you pay the same amount you would pay with direct insurer via a policy with me and we get you a better policy that will be lower cost in the future. Most clients would sign up for that.
If the math doesn’t add up and you need to charge more in the first year, you do the break even calcs to show the client that by paying more for advice now and less each year you will have paid the same amount of premiums in 3 years time, and will pay less in premiums after that. Like we do with level premiums.
Maybe direct providers should have to clearly demonstrate that they have researched alternative products and strategies and will leave the client in a better position? Not likely!
Well said! O’Dwyer has just cut and paste policy from FSC/ big 4 banks
O’Dwyer still doesn’t understand or get it (or perhaps understands too well !).
Removing a direct carve out is irrelevant. Direct insurers sell overpriced, poor quality insurance directly to the public via staff who are paid salaries and bonuses. The LIF will not effect them in the slightest.
The LIF only effects independent advisers who want to specialise in risk only advice and who won’t now be able to afford to remain in the industry without charging the end customer a fee which they never had to pay before.
So what then happens of course is the customers who can’t afford to pay that fee have no alternative but to go directly to the overpriced, poor quality products.
Great news for the FSC and insurance companies but very bad news for the customers.
Could it not be more obvious that the reforms will not provide a level playing field only slant it directly towards the banks and insurance companies??
A job well done Kelly O’Dwyer who has either fallen for this or might as well work for the banks.