The Council of Australian Life Insurers (CALI) has welcomed the passage of the first tranche of the government’s Delivering Better Financial Outcomes (DBFO) reforms, which sailed through Parliament last week after some last-minute amendments.
In a statement, CALI said the first bill would give Australians more choice around getting advice about their life insurance needs and will also “back-in the vital work of financial advisers across the country and help reduce red tape”.
CALI chief executive Christine Cupitt said the first tranche of reforms was a “good first step” to addressing the advice accessibility crisis in Australia.
“People need someone to talk to. Making decisions about your financial future is hard, and you shouldn’t have to do it alone,” Cupitt said.
“Expanding Australians’ access to affordable advice helps empower them to make informed decisions so they can live in a healthy, confident and secure way over their lifetime.”
The industry body also pointed to research it had commissioned that found in the past three months, more than a quarter of Australians have considered getting financial advice on life insurance but haven’t acted on it.
Over that same time period, just 8 per cent have received advice on life insurance.
A third of people who did receive advice on life insurance got it from their family and friends, which CALI said illustrated that the cost of advice remains too high and more needs to be done.
“We want to see legislation that allows life insurers to provide simple advice on their own products, when customers ask them to,” she said.
“We want to give Australians more choice at no cost to them. We shouldn’t be turning them away when they ring our call centres, giving simple answers to simple questions is basic customer service.”
In a statement shortly after the bill was passed, Financial Services Minister Stephen Jones said the second tranche of reforms would “further increase access and affordability of financial advice and will be developed over the second half of the year”.
“This includes the government’s commitment to reform statements of advice, modernise the best interests duty and remove the safe harbour steps, and increase the provision of advice by financial institutions,” Jones said.
“The government will ensure these reforms provide access to safe, affordable and quality financial advice to deliver better outcomes for the millions of Australians seeking financial advice and information.”
