Advisers Sceptical About Current LIF Provisions

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Do you believe the Life Insurance Framework reforms will be implemented on 1 July 2016 with no further changes?
  • No (68%)
  • Yes (21%)
  • Not sure (11%)

Almost three advisers in four do not believe the Life Insurance Framework reforms will be implemented on 1 July 2016 without any further changes.

In our latest poll, 72% of advisers have voted ‘no’ so far, to our question about whether they believe the Life Insurance Framework reforms will be implemented on 1 July 2016 with no further changes. 21% believe no further changes will happen, while 7% are not sure.

Agitation for further changes to the Life Insurance Framework, specifically regarding the two most contentious provisions relating to commissions and clawbacks, is continuing to take place via a number of sources.

This activity includes direct representations to the Assistant Treasurer by individual advisers, further meetings taking place between adviser associations and the Assistant Treasurer this week, as well as calls by advisers and licensees for advisers to approach their local member of parliament – this from an adviser comment to our poll:

“I urge all other advisers to call/see your ( Liberal ) federal member and request they speak with Kelly O’Dwyer about your concerns.”

… the door remains open to further consultation

Earlier this week, AFA CEO Brad Fox told delegates at the 2015 AFA National Adviser Conference in Cairns the door remains open to further consultation with the Government and that the Association was meeting Assistant Treasurer, Kelly O’Dwyer, in her Melbourne electorate this week. However, Fox also told a media briefing at the Conference that even though the implementation of the LIF reforms had been delayed by six months, this did not necessarily extend the timeframe during which final details of the proposed provisions must be made locked away, in order to allow sufficient time for all industry stakeholders – advisers, licensees and product manufacturers, to position their businesses for the coming changes.

While the door appears to remain open for changes to the Framework, it remains to be seen how significant any further changes will be.

In the meantime, we welcome your opinion and your comments on how you see this issue, as our poll remain open for another week…



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6 COMMENTS

  1. You’re all kidding yourselves.
    The government has no intention of changing anything that’s on the table including 3 year “clawbacks” . Neither assistant treasurers past and present understand the impact these provisions will have on the industry. They will find out when it’s too late to see how the insurance industry has been decimated by the banks and Insurance companies who have been the architects of this along with the ISA.

    The Australia we used to know,… that stood up for free enterprise, small business, fairness and any other worthwhile quality you care to use…..no longer exists so long as the left leaning stooges try to control how we now are expected to function.
    If you think the AFA or the FPA will do anything,… then just look at their record/performance since the Rudd/Gillard/Rudd era and beyond, it’s abysmal and virtually non existent.
    If they were race horses, you wouldn’t blow another cent on them.

  2. With likely significant reduction in revenues through the LIF and seemingly compulsory membership of an adviser association – like it or not – plus the $400 fee to the Tax Practitioners Board every renewal it will mean leaner business models for most of us. It really is a mess.

  3. The AFA continue to be all over the place on this. One minute they are agreeing to LIF without their members support, next they seem to be disagreeing with the FSC over clawback, then they are saying they think advisers are agreeing (when obviously we dont). We simply don’t have any strong leadership in the AFA to fight for their members rights. They seem to be happy with compulsory membership while they help the FSC stitch us all up. Total embarrassment.
    Compulsory membership isn’t going to do them any favours when half their members are forced to leave the industry!

  5. It is not over until the lady (who most likely had to be sold a loading due to her size) starts singing. This lady will find it very difficult after 1 July 2016 to find any adviser to recommend insurance for her if no further changes are made to LIF.
    At least Centrelink will still be available to offer financial support to her (or her family) after 1 July 2016.
    If you don’t think this scenario is going to happen with many families post 1 July 2016 then you are dreaming…
    Only time will tell if the government bothers to listen to those at the coal face and make changes to LIF such as leaving clawback at one year…

  6. How ironic that the federal Health Minister is currently trying to stamp out “junk insurance” in the health insurance space, while the Assistant Treasurer is trying to usher in changes that will see “junk insurance” proliferate in the life & disability space.

    Junk insurance is insurance sold via simplistic advertising, with lots of built in exclusions that clients don’t notice at purchase time. They then get a nasty shock when they try to make a claim.

    Under LIF, most people won’t pay the full cost upfront for professional insurance advice, and advisers won’t provide advice for the high risk low remuneration options available within the products. Instead, consumers will be seduced by simplistic advertising into buying direct products whose limitations they do not understand. ie. Junk Insurance.

    It is absolutely astonishing that so called consumer groups are supporting this change designed to line the pockets of insurers, which will have profound negative effects on consumers.

    Let’s hope Susan Ley has a chat with Kelly O’Dwyer at some stage to warn her about the dangers of “junk insurance”.

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