Adviser associations have welcomed the passing of the Life Insurance Framework (LIF) legislation stating it provides clarity for advisers but warned further life insurance related reforms were yet to come.
The LIF legislation, formally known as Corporations Amendment (Life Insurance Remuneration Arrangements) Bill 2016, was passed by the Senate on 9 February after progressing through the House of Representatives late last year.
Financial Planning Association (FPA) Head of Policy and Government Relations, Ben Marshan said the passing of the legislation ended the uncertainty for advisers around insurance advice which had existed since May 2016 when the legislation was delayed by the Federal Election.
Association of Financial Advisers (AFA) Chief Executive, Brad Fox said LIF was wider than the legislation and despite it passing through Parliament the reforms were not complete.
“The Life Insurance Framework is wider than the Bill. It includes broadening Approved Product Lists, simplifying Statements of Advice, and very importantly a life insurer Code of Practice,” he said.
“Progress has been made in these areas, but more work is required from the insurers, superannuation trustees, ASIC and some licensees to carry their share of life insurance reform and we will continue to push them to complete these reforms by the new remuneration start date,” Fox said.
Both groups also welcomed the passing by the Senate, on the same day, of the Corporations Amendment (Professional Standards of Financial Advisers) Bill 2016 with Fox stating it would open the way to the recognition of financial advice as a profession.
FPA Chief Executive, Dante De Gori said the professional standards bill would provide assurance to consumers that advisers will be highly trained, experienced and subject to an enforceable code of ethics.
Both Bills will still need to be signed off by the Governor General, Sir Peter Cosgrove, granting them Royal Assent, before becoming law.
The LIF legislation will take affect from 1 January 2018 and the professional standards laws to begin from 1 January 2019.
Why did we bother spending many hours over many months putting in submissions to the PJC who are looking into these areas and who are meeting next week to thrash out the findings, when last week, this misguided LIF Legislation was passed without any consultation to a Parliamentary Joint Commission investigation set up for this purpose?
As to Adviser Associations welcoming the passing of the legislation, you do understand that members pay your salaries and a Bill that allows your members to be forced to pay back money to Life Companies because of, in most cases, the Life Company incompetence with no fault of the members, is hardly something to celebrate.
As to ongoing professionalism, please do not forget to disclose the compulsory membership you lobbied the Government for, that increases your revenues to pay your bloated salaries, while you agreed to reduce ours.
Neither the FSC, ASIC, AFA or the FPA has the independent adviser or clients in their best interests.
ASIC were happy to report incorrect data to gain extra funding. They got it.
The AFA and FPA were happy to go along with it as long as they got compulsory membership and funding from the big end of town out of the deal. They got it.
The FSC were happy to report incorrect data and act as an illegal cartel to increase profits and get rid of competition. They got it.
It is very simple corruption and important to understand that unless you are an aligned adviser the AFA or FPA could not care less about you and they will not work for you.
The AFA and FPA are simply paid for organisations by the FSC members and in no way different from any other corrupt cartels who might buy politicians or newspapers to report and do what they are paid to.
Lets not be blind. Why do we think the AFA and FPA were so quiet during the process?!
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