After media speculation today, Suncorp Life has confirmed it will begin a six-month transition out of its self-employed, aligned adviser networks, Guardian Advice and Suncorp Financial Planning, in order to “simplify its distribution model”.
According to ASIC’s adviser register, this move may affect more than 200 planners.
Acting Suncorp Life chief executive Jeremy Robson said the decision came after much consideration but ultimately supported the business’ direction.
“We have made the decision to simplify our distribution model in line with our strategic priorities and in the interests of advisers and customers. We’re focused on working with our independent adviser and direct distribution businesses to support the evolving needs of customers,” he said.
“Over the next six months we will be working closely with both the Guardian Advice and Suncorp Financial Planning advisers to explore options such as transitioning them to other licensees in the market if they choose.”
Mr Robson added that the immediate priority was the smooth transition for self-employed, aligned advisers.
“Our immediate goal is to work closely with advisers to identify their options and make the transition as easy as possible,” he said.
Guardian Advice was placed under licensing conditions by the Australian Securities & Investments Commission (ASIC) in December 2014.
This included the appointment of independent expert, PricewaterhouseCoopers (PwC), to complete a review of some of Guardian Advice processes and procedures.
According to Guardian Advice it completed recommended business improvements specifically in regards to compliance procedures.
Suncorp Life will continue to work with ASIC’s requirements during the transition from the self-employed, aligned adviser network, Guardian Advice and Suncorp Financial Planning, over the next six months.
Leo, you raise an interesting point, another interesting point is how long will Suncorp keep the grandfathered commission coming from planners who have previously left the group (left, retired, etc.) but clients haven’t followed?
This is part of a greater trend in which advisers are being asked to choose between one of two futures; advice focussed or product focussed.
Not saying you cannot give good advice on a product aligned licence, but there is an inherent conflict that may stand in the way of giving the best advice to a client.
For the record I recently joined a product aligned licensee and I find their APL restrictions a constant battle. They really don’t like me asking to go outside of their heavily biased APL.
I for one am supportive of less product-owner involvement in the advice process.
A logistical question- Will the commissions and ongoing service fees received advisers be transferred automatically to a new AFSL? Will they require signed permission from each individual client?
No surprise here. Suncorp’s strategy for life insurance appears to be one of progressively withdrawing support for advised insurance, to focus on their direct distribution insurance products.
Their hollowing out of Asteron, and their aggressive lobbying for the anti adviser elements of LIF, are also in line with this strategy.
With all the new compliance laws and risk amendment policies by ASIC I expect many more to follow
With the support of so called adviser representatives AFA and FPA, and government support to assist the big end of town, there is no need for a distribution arm they will have direct marketing and Union /Industry Super funds to provide them.
First they slash level commissions and now they cut off self-employed advisers with only 6 months to get their own AFSL or transition away. What a lousy Christmas present. Switching licensees is a horrible transition, further complicated by FOFA. If other banks follow this model, self-employed advisers are headed for very dark days indeed. Totally conflicted, in-house advice from product providers seems to be where we are headed.
Surprise, surprise, Asteron / Suncorp are finally showing their true colours, and they want us to believe they are still supporting the IFA’s. I’m certainly happy I got out of there when I did.