February 27, 2018
Life insurance advisers are set to depart the industry en-masse in the next five years, Synchron Director, Don Trapnell has claimed.
Trapnell said, “A mass retirement date for life insurance advisers is looming and that date is 31 December 2023”, which is the day before new education standards become compulsory.
He referred to a number of industry surveys that estimate the level of advisers departing the industry will range from around 16 per cent to 34 per cent.
Trapnell said the projected numbers of advisers intending to step out of the advice sector in the next few years highlighted that the mandatory education requirements announced by the Financial Adviser Standards and Ethics Authority were over-prescriptive.
“A Government which goes headlong in pursuit of regulation to the extent that it kills off an entire sector of an industry does the community a grave disservice. The industry is not that sick. I believe it is akin to a doctor over prescribing medication to patients and in the process killing them,” Trapnell said.
“A mass retirement date for life insurance advisers is looming and that date is 31 December 2023”
He also said it was his belief the Government was trying to force life insurance advisers to become full service financial planners, and it was ‘inappropriate’ for life insurance advisers to have to hold the same education qualifications as financial planners.
“Risk advisers need qualifications in life insurance. Their job is to arrange insurance so that their clients are financially protected should the main income earners die or become unable to earn an income,” Trapnell said.
“To do this job, they do not need to understand transition to retirement strategies, the intricacies of managed funds, or the latest superannuation caps legislation. That kind of education is not appropriate,” he added, repeating his call for a separation of the two advice disciplines (see: Trapnell Calls for Separation of Risk Specialists).
Trapnell added the departure of life insurance advisers would also have a negative effect on consumers who would be forced to buy life insurance directly from life insurance providers without the benefit of advice.
He said Synchron would continue to call on the Government to allow streamlined education pathways for the differing financial advice disciplines.