Financial advisers have been urged to join a letter-writing campaign targeting Liberal Party MPs arguing the Life Insurance Framework provisions will hurt small business and not create any useful consumer benefit.
The campaign has been initiated by Synchron Director Don Trapnell who has written to advisers telling them that the changes around “…the commission levels and the 3 year responsibility period proposed by the LIF…are amongst the most potentially devastating our industry has ever faced.”
“If we sit and do nothing, then we only have ourselves to blame,” Trapnell stated, providing recipients of his letter with the suggested wording of another letter he urged should be sent to Liberal MPs and Senators in each state.
“Clearly we need to concentrate on Liberal members of parliament for the other side will disregard any pleas we may have for help,” he said in the cover letter.
The form letter to be sent to MPs and Senators questioned the validity of ASIC’s Report 413 and the process that went into creating recent proposals.
The letter stated ASIC Report 413 was based on 220 adviser files and the results from ASIC’s review of those files had been accepted without scrutiny while the Financial System Inquiry (FSI) recommendations around life insurance lacked any adviser input.
If we sit and do nothing, then we only have ourselves to blame
“The FSI terms regarding life insurance were drafted without any adviser input. Banks (the big winners from the announcement) used this to try and force initial adviser commission payments down to 20% and used this report as their bargaining tool,” the letter stated.
It also stated only the banks and large institutions would benefit from the LIF proposals while consumers would not pay for insurance,
“Will consumers pay for upfront advice? Did they want to pay the $7 medical co-payment? How do consumers benefit by paying fees and premiums if the total is more than premiums alone?”
“Banks have set themselves up to gain greater profits – there is no obligation for them to decrease premiums. In fact, they have indicated that reductions will probably not be possible.”
The letter closed by querying why the current Liberal Government would proceed to hurt small businesses.
“If this Liberal Government is committed to small business – why has the Government placed a huge competitive disadvantage on small business advisers by requiring them to provide life insurance advice at a loss, and given the banks a huge competitive advantage?
“Since when has price fixing become a Liberal policy?”
We need access to pro forma letters and addresses of all relevant Liberal MP’s.
Let’s give it a go!
We have the addresses, including email if you’d like to write them, TP.
im interested can you e mail them to me
Ken, we can direct you to the appropriate website where you’ll find all members details including addresses and email.
We’d rather not do so on a public forum like this though. So if you’ll send us your email address we’ll return it with the details you need. My email address is paulherring@bigpond.com
You didn’t follow it up, Ken.
I think we can all agree Don that we are very grateful for you doing what the AFA and FPA should be doing. Thankyou
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