The Association of Financial Advisers has strenuously opposed what it refers to as the ideological determination put forward in the Banking Royal Commission final report to remove all conflicted remuneration.
AFA CEO, Phil Kewin, has said that while recognising the importance of the Royal Commission process and the primary focus upon the delivery of improved consumer outcomes, the AFA nonetheless objects to a number of the key recommendations relating to financial advice.
Kewin said that while restoring trust has been an overriding theme for banking and financial services, “…the AFA does not accept that an ideological determination to remove all conflicted remuneration should necessarily override all other considerations in the design of the framework for financial advice.”
…the AFA does not accept that an ideological determination to remove all conflicted remuneration should necessarily override all other considerations
He continued, “Access to advice, affordability and efficiency of the provision of advice should also be key considerations,” adding the AFA wants to ensure access to quality financial advice is readily available and not just reserved for the wealthy.
Kewin said the Royal Commission recommendations will only increase the cost of financial advice, when what is really needed are changes to reduce the cost and make it more readily available: “The Royal Commission has not put forward a case for why these recommendations will benefit consumers,” he said.
In an update to members, Kewin said he and AFA GM Policy and Professionalism, Phil Anderson, will be meeting with politicians in Canberra next week to discuss the Royal Commission’s outcomes and recommendations.
Please ask this question on my behalf ” How can so many more advanced countries than Australia be SO WRONG in agreeing to Life Insurance Commissions, when they service hundreds of millions more customers than Australia………….. and control the ENTIRE life re-insurance market?
They aren’t sucking up for re-election!
There has not been one singular comment from any Life Insurer that I am aware of following the RC recommendations coming out in support of advisers continuing to be remunerated at least by the existing commission structures following the negotiated outcome from LIF…….not one.
There has been complete and utter silence from the very companies that have benefited greatly over the years from advisers placing theirs and their client’s trust and business with these organisations.
Unless I am mistaken, I have heard not one supportive statement from any of them.
One can only therefore assume, this so called ” relationship ” that advisers have with the Life Insurers is like a very,very bad marriage and all one way only.
Its like we live in the same house, but no longer sleep together.!!
They will chase and accept the new business and when it dries up and you are servicing existing business, you never hear from them.
So, why aren’t the insurers openly and strongly criticising the proposed recommendations to reduce commissions to zero when they know the quality business received comes from quality risk advisers and has longevity.
With no risk advisers left soon, will the insurers be satisfied this is the outcome they really want?………the cynic in me is worried this may well be true.
Well said and agree not one life insurer has stood up for the valuable role that we do for our clients both during the underwriting stage, negotiating loadings and exclusion’s and most importantly working for our client at claim time. Who will do this in a zero commission world?
The mortgage brokers product providers are the banks and lenders.
In the last few days there has been many reports indicating the banks know if the mortgage brokers are put out of business, a large proportion of their current inflows will be effected.
Secondly, Josh Frydenburg has been quoted indicating he knows this outcome will place all the power back into the banks hands, restrict competition, monopolise the market and contribute to an adverse consumer outcome.
If the risk advisers are forced out of business, the direct business will flourish which has already seen significant adverse outcomes for consumers already….and that is with the competition of advisers in the marketplace.
Imagine if the direct insurers had free reign and virtually no competition at all.
The outcome for consumers would be disastrous.
It’s not Josh they need worry about, it’s Chris Bowen & Labor who have stated as soon as they get in this year, out goes the broker commissions. Go figure? Why is Labor so keen to give the big 4 total control of the loan market? Same reason that they want Industry super funds to get the lion’s share of risk insurance [via group life]. We all know what the real agenda is here and it’s got absolutely nothing to do with the clients’ best interests! Lefties are like leopards, they can never change their spots.
Righties are like tigers they can never change their stripes.
Putting aside all the consistent and very valid arguments advisers are all putting up against the ludicrous and unfounded RC recommendations, I also want to know this…
As advisers, we’re all held to account for just about everything that happens in this industry when something goes wrong today. Even when married clients get divorced and cancel their policies, it seems to be our fault now and have our rightful income clawed back.
Who’s going to be held accountable when the grossly negative impacts of these latest recommendations play out, advisers leave the industry enmasse, life insurance company competition dries up and Australian consumers are left high and dry without good quality advice, at affordable rates, still being readily available? Who??
If this BS is going to go ahead, someone absolutely must be held accountable – and their income clawed back, when it does. Double standards cannot play out here.
Phil, good luck with your meetings in Canberra.
An observation by many politicians from all the previous discussions over the years, is that they are very busy, have limited knowledge of how the Life Insurance Industry works, or how the Australian public operate in this area and that they need things to be kept short sharp and straight to the point.
Politicians do not read pages of information they do not understand, or are not that interested in.
Politicians are being lobbied from every Industry and vested interest group and even though we think our issues are important, unless Phil you go in and explain the severity of the situation quickly, with hard hitting facts and feedback from Advisers as to their intentions to back up your assertions, you will lose them and we will be back to heading off the cliff face.
Every discussion needs to have a clear agenda, with a back up point of attack, when the usual occurs and the politicians refer you back to previous investigations, or the regulators, who are clearly inept and totally out of their depth.
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