Partner of Bombora-aligned MBS Insurance, Trevor Shipton, said in a submission to the Parliamentary Joint Committee inquiry into the life insurance industry that the LIF reforms as they stand will decimate the self-employed sector of the life insurance industry, giving the banks and insurers more money and power.
“As the aligned adviser works inside of the profit pool of their employer, if their commission is reduced, their wage can simply be increased, because the profits will stay in the same environment,” Mr Shipton said.
“In contrast, the [non-aligned] adviser receives the full impact of the reduced commission, as they have no parent company or employer that can reimburse them in other ways.”
Director of self-licensed DJM Financial Services, Damien McColl, also stated his opposition to LIF in his submission, citing a case from April 2011 in which he was heavily involved in a client’s successful total and permanent disability claim.
In that case, Mr McColl said the insurer wasn’t providing a service to enhance the claim’s chance of succeeding.
He said the insurer seemed to rely on particular medical reports it had sought and the wording of the questions the insurer asked the doctors did not bring out all the information needed to assess the claim thoroughly.
“The client was very upset and stressed by the situation. We succeeded in getting the claim paid and this was a lot of money for this client,” Mr McColl said.
“It took over two years from start to finish and a lot of my involvement. The only fee I received from this client was the normal renewal commission attached to the policy, and this policy commenced before I was looking after the client.
“I spent countless time on this. I did it for the client.”
Well of course it will not effect them, this was always about destroying the competition, us. Well done to the clearly manipulated, uninformed politicians who voted to destroy the banks and insurers competition, without one single benefit to a consumer. Thanks a bunch
My comments today on the accompanying article on Shelf Space Fees overlaps into this area as well. To the best of my knowledge my non-vertically integrated Licensee has the widest APL available and they have themselves criticised this bias practise that benefits everyone except the client. But when has the FSC ever put the client ahead of themselves. Maybe we need a Best Interest Duties Checklist for Life Offices, eh?