Lobby for changes to clawbacks, advisers told
With changes to the life insurance industry causing concern across the life insurance sector, dealer group Synchron is urging advisers to fight for changes to the “inequitable” proposed clawback policy.
The director of the risk specialist dealer group, Don Trapnell, said the three-year clawback policy is the most “inequitable” element of the Life Insurance Framework, and advisers should be lobbying to have it changed.
"There is no industry in the whole of Australia that we are aware of where the income of participants is dictated by a third party up to three years after the service has been delivered," Mr Trapnell said.
"However, the clawback provisions are not yet set in stone and with the cabinet reshuffle, this is an opportune time to do something about it," he said.
Mr Trapnell added that the clawback period is akin to asking politicians to pay back some of their parliamentary salaries when they lose their portfolios or fail to be re-elected.
"Clients are just like voters – they can choose to replace their adviser for any number of reasons. I wonder how our politicians would feel being forced to give back some or all of what they earned after losing an election."
Synchron has drafted a template letter for their advisers to send to their local members of parliament, urging them to reconsider the three-year responsibility period.
"We urge all advisers to follow Synchron's lead and petition the government while they still can," Mr Trapnell said.
Synchron's move follows the recent calls from non-aligned dealer group Sentry for advisers to call on Prime Minister Malcom Turnbull to review the proposed insurance reforms.
Managing director of the dealer group Murray Hills said all Sentry advisers would be lobbying to have changes made to the reforms.
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