Advisers on APLs – Three Insurers Not Enough

The results of our latest poll suggest the large majority of advisers prefer access to more than three insurers on their licensee Approved Product Lists.

Based on the recent announcement by the Financial Services Council that it will require at least three insurers on any APLs operated by its member distribution organisations, this poll suggests those and other licensees may want to consider opening access beyond that minimum of three.

By far the most preferred option for advisers is for licensees to offer an open APL architecture (40%) while the next 30% preferred access to either six or more than six insurers.

…having only three insurers on an APL, even with a good ‘off-APL’ process, is simply not enough

In its release just before Christmas, the FSC did stipulate its licensee members would be required to offer a solid ‘off-APL’ process in those circumstances where advisers needed to look elsewhere in order to meet their clients’ best interests. Although we made sure to point this out when we released our poll last week, it would appear that, in the mind of the vast majority of those taking this poll, having only three insurers on an APL, even with a good ‘off-APL’ process, is simply not enough.

We note also that Policy Recommendation 4 in the final report released by John Trowbridge in March 2015 following the Life Insurance and Advice Working Group process recommended that, to ensure competitive access and choice for all advisers and their clients to available life insurance products, every licensee should include at least half of the authorised retail life insurance providers on their Approved Product Lists. This translates to a minimum of six insurers in today’s Australian market.

We’ll keep you posted on any further developments relating to minimum APL numbers as our poll remains open for another week…