Breakaway Survey Rejects LIF Model and Association Positions


A group of life insurance advisers have rejected the view the Life Insurance Framework (LIF) is workable for advisers and that adviser associations adequately represented their interests during negotiations around the framework.

The Life Insurance for Consumer Group, which is made up of an affiliation of advisers and licensees, have released the results of a survey which the group claims reveals the negative impact LIF would have on the clients, employees and small businesses of life insurance advisers.

According to the survey methodology, 5000 advisers were invited to respond with 509 actually doing so during a two and half week window in September.

The survey results, hosted at the Life Insurance Direct website, revealed 64% of respondents preferred an 80/20 hybrid commission model with a one-year clawback, while only 0.2% of respondents said they could work under the 60/20 model proposed under the current LIF provision.

“The conclusion is, consumers will not be able to receive quality, affordable and compliant advice under the proposed 60/20 model,” commentary included with the survey stated, adding that 83% of respondents believed the three-year claw back period would impede their ability to comply with best interest duty obligations.

The survey also found that 77% of respondents disagreed with the LIF model proposed by the Association of Financial Advisers (AFA), Financial Planning Association (FPA) and the Financial Services Council (FSC).

In response to this finding the survey commentary stated “this clearly indicates that even for those who are members with these bodies, the views the relevant association are putting forward to “represent the industry” are evidently quite the opposite.”

It is clear from these results that on the issue of LIF, neither the AFA nor FPA are correctly representative of the millions of customers who seek insurance from an adviser

“It is clear from these results that on the issue of LIF, neither the AFA nor FPA are correctly representative of the millions of customers who seek insurance from an adviser,” the commentary also stated.

However, the survey also found that around 40% or 202 of the 509 respondents were not members of any association and challenged the view that the AFA and FPA were representative of industry, stating “their reach and representation is in fact severely limited”.

“The opinions and impact measurement for non-members must be taken into account prior to major decisions being made that will affect “the industry” with the survey concluding that for “millions of advised consumers, …if their adviser is not a member of any association, their needs have not been represented through the current LIF proposal process”.

The survey also overwhelmingly rejected the suggestion that the LIF proposals would benefit consumers with 92.9% of respondents stating there was no consumer benefit leading the survey commentary to state that “the conclusion for consumers, is that the industry believe that LIF will negatively impact their ability to receive quality and affordable advice, which is contrary to stated objectives of LIF”.


  1. Memo Mr Fox A quick hands up in a meeting somewhere is no valid survey of RISK WRITERS OPINIONS on LIF. Was the meeting stacked – you know, lots of pretend RISK WRITERS and insurer BDMs
    Unions are required to have secret ballots- stops all sorts of pressure, real and imagined, being applied
    I dare you to email survey your RISK WRITER MEMBERS only. BTW, the AFA does not get to write the questions

    • If I had been asked I would have agreed ? It is good to see people take up the challenge and get some factual results not those assumed by parties that have only their self interest as the issue
      It is a bit disappointing though that only 10% of those asked to take part actually did ! With our industries future hanging on making significant changes to what is proposed we all need to be vocal not just10 %
      I might ask that I be included next time and if possible get your surveys to more advisers The weight of numbers is the only way that change needed is going to happen

  2. Will Brad Fox go down in history as the “Neville Chamberlain of Life Insurance”?
    Who will be our Winston Churchill?

  3. Don’t be mislead by the 10% response. The recipients of the email had 7-9 working days to respond, and the distribution of the email took up a few of those days. Secondly the adviser list came from supportive dealers and a third party service provider and included many who were not risk writers ( ie, 80% + of revenue from risk )
    The really important point is only 0.2% of respondents said they could survive with what the AFA/FPA agreed to, under the kosh, on our behalf, with the Bully of Kooyong. What does it take to rattle the AFA that they stuffed it !

  4. By the way a 10% response rate on a survey is actually pretty good. Most surveys get about a 5% response rate. We all do need to stand up and make a noise though, go to our local MPs. This definitely doesn’t deliver better outcomes for consumers, with banks pocketing the difference and clients ending up paying more for risk advice.

  5. I agree with Old Risky – The AFA has never done a survey of its members on such an important issue. This survey shows clearly that advisers are not in agreement. What exactly does it take for Brad Fox and the AFA to do the right thing by its membership and not the FSC???

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