In a letter written to ACCC chairman Rod Sims – seen by ifa and provided on the condition of anonymity – a Canberra-based adviser has flagged a number of concerns regarding the recommendations made within the report.
The adviser argued that as the recommendations currently stand, they “constitute a breach” of the former Trade Practices Act, now known as the Competition and Consumer Act, in terms of an “abuse of market power” by the life insurance product manufacturers.
The adviser explained this “breach” consisted of the life insurers acting together to remove any possible opportunity for advisers to negotiate remuneration, including volume-based bonuses.
Commenting further, the adviser said they based this belief on the strong similarities of the FSC’s submission to LIAWG independent chairman John Trowbridge and the final report released in March.
This indicated some mutual agreement by the insurers to mandate the recommendations, they said.
In a separate comment made to ifa, the adviser said Assistant Treasurer Josh Frydenberg’s comments that AMP’s decision to move away from a high upfront risk commissions was “not enough” was evidence of “inappropriate ministerial interference” in the market.
“While it’s fine for the minster to comment that ‘the industry has weeks, not months’ to arrive at a conclusion, his role is not to take sides in the argument by ridiculing AMP’s approach,” they said.
“The minister is denying AMP’s attempt to remain profitable if the banks should succeed in their bid to eliminate independent advice, and then eliminate consumer protection by abandoning personal advice, instead flogging inferior non-underwritten life insurance products under a general advice exemption.”
Well done maybe its time the associations started doing the same instead of holding hands with the FSC and the temporary government ministers who will be there two minutes after putting his nose in it, lets all work together.
too bad the media doesnt care enough to look into this collusion from some of the providers. And the client gets NO reduced premiums when ripping off advisers. Win win for the providers, isnt it?
The only acceptable option now is to have the entire process cancelled and to re-commence with a strictly controlled, non-conflicted process addressing a broad range of issues and based on independent, mandated data to support any proposed changes.
As the process that has emerged clearly has resulted in allegations of disunity, allegations of deceptive practices, power plays,vested interests and allegations of breaches of the Terms of Reference of the LIAWG, it surely must not be acceptable that any recommendations put forward from this process can be taken as appropriate.
The over-arching influence that has emerged from the product providers in this matter indicates a very unhealthy level of control exercised in order to achieve their intended outcome of increasing profit margins as a priority to increasing the benefit to the consumer.
This is a game of power and corporate control.
[quote name=”joe”]Great! Will be interesting to see if anything happens… Furthermore, one has to wonder why the two “adviser voice” groups who supposedly exist solely for our benefit, the AFA & FPA, did not do this themselves with perhaps legal assistance to make an ACCC submission that much more weighty?[/quote]
They do not truly represent us (risk advisers) as many of their individual members do not understand or believe in the insurance industry. The other issue is they are substantially funded by the insurers/banks as well as by the many licensees out there – mostly owned by the banks. How can they honestly represent the individual?
[quote name=”glenn beard”]Great call. Yeah not sure that any Australian government can legislate what a business owner can earn?
Health insurance industry is an example. They dictate how much the insurers can increase or decrease (not likely) premiums each year.
Government banning mortgage exit fees…
Great! Will be interesting to see if anything happens… Furthermore, one has to wonder why the two “adviser voice” groups who supposedly exist solely for our benefit, the AFA & FPA, did not do this themselves with perhaps legal assistance to make an ACCC submission that much more weighty?
Does Josh Frydenberg have a conflict of interest with his chief of staff being a former FSC policy director?
Bet there is no support offered to independant advisers even tho everyone knows the big banks are driving the bus
ASIC should also take note and move to protect independent advisers immediately. Everytime ASIC makes a move at the moment they play right into the hands of the product providers who want us gone. ASIC appear to be too stupid to realise this. If they don’t wake up quickly independent advice with be a thing of the past, unless you are very wealthy. For the rest you will have to deal direct with product providers and they will screw you over with rubbish policies full of loopholes. They are doing it already!
Great call. Yeah not sure that any Australian government can legislate what a business owner can earn? Then they wonder why we vote them out of office after 1 term? The life insurers are saying things to our face and a different story when they meet at the FSC HQ. The breach of the highest order. The risk writers have long memories part of the training.