Financial advisers and licenses will have one month to make submissions to the Federal Government after it announced that submissions regarding draft legislation will close on 4 January 2016.
The Government released the draft legislation on 3 December, a month after it had announced that clawbacks would be reduced to two years, instead of three.
A statement on The Treasury website, through which submissions can be made, said the draft legislation was “to better align the interests of retail life insurers with consumers”.
A similar statement from the Assistant Treasurer, Kelly O’Dwyer said the draft legislation would “give effect to an industry reform package which will improve the remuneration arrangements in the life insurance advice sector”.
“This package will ensure that the interests of financial firms and consumers are better aligned,” O’Dwyer said, stating the draft legislation was the next step after the November 6 announcements.
The draft legislation will seek to amend The Corporations Act 2001 to give the Australian Securities and Investments Commission (ASIC) the power to create a legislative instrument to set caps on commissions and implement clawback arrangements.
O’Dwyer stated the “the final form of ASIC’s instrument will be a matter for ASIC, as the independent regulator” with ASIC yet to begin its separate consultation process on its legislative instrument.
Stakeholders who wish to make a comment on the exposure draft legislation can do so via the Treasury website.
What absolute rot Kelly O’Dwyer!!!! This ongoing statement that its all about “aligning financial firms with consumers” is nothing but political rigmarole designed to impress voters. It’s completely UNTRUE and anyone that believes it, is a mug.
North Melbourne’s former coach Denis Pagan had a great saying that is so appropriate right now…”Don’t urinate down my back and tell me its raining.”
It seems both yourself and the former Assistant Treasurer have a penchant for overlooking the fact that there has been no evidence whatsoever that proves Upfront Commissions lead to poor advice from advisers. We keep asking for evidence of it yet no-one seems to be they able to provide it.
This is a farce created by people who have no real understanding of how the LIFE INSURANCE industry works or how the process with a client works. It’s been completely conspired by people who have hidden agendas – not the consumer in mind at all. Just tell like it is so we can all agree that’s the real plan here. Its all about the money, pure and simple.
You are correct ARIA, The life companies are the most active with hidden agendas. We now have and INCREASE to TWO YEARS in clawback (NOT a decrease from THREE!! – what dribbling cheating language!) and a REDUCTION in upfront COMMISSIONS. These life company executive creatures have a lot to be ashamed about as they STILL BLEAT thay are committed to advisers to anyone stupid enough to listen to them – PASSIONATE about adviser support they like to moan. Purrlleassse! I will vomit if I hear it again. Hopefully on their foot in front of me.
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Mark my words, life companies will not rest until they are rid of the expensive commission-receiving advisers that blight their work days. They dream of a Robo-advice future supplying them with unlimited income streams without those pesky, claim-friendly and meaningful contractual definitions that spoil their day. No advisers to receive commissions either! Life will be great from them, for a while until claims create nightmares with no advisers to help. The future that life companies envision could NOT be any more AGAINST the client’s best interest. SHAME on every life company exec responsible for their part in this dishonest, shameful, and dark chapter in the history of our once valuable and proud industry. Client best interest? – don’t depend on a life company if you are an adviser or client.
While I agree the govt and FSC have been utterly deceitful and duplicitous in all of this, I’m not sure their real agenda is too well concealed. The real agenda of LIF is to make it harder for consumers to get advice, so that more consumers are suckered into buying junk insurance via advertising.
This is much more profitable for the insurance companies. Lower commission costs, no need for BDMs who encourage churn and then expect bonuses for it, lower underwriting costs by relying on lots of manadatory built in exclusions, but most importantly MUCH LOWER CLAIMS COST because far fewer claims are eligible for payment.
The only future for insurance advice is to alert the public to the dangers of junk insurance.
For an industry that has operated for the past few decades without a catastrophe, why is there such urgency to fix a supposed problem ( according to ASIC 413 ), when policy holders are not up in arms about anything. This whole debacle smells more and more like a set-up. Submissions during the lead up to Christmas/New Year ( closing 04 January 2016 ) is another example of sneaky behaviour. Come clean Kelly O’Dwyer, just what are you trying to achieve. I’ve been in this industry for over 25 years, and I’m not impressed, the longer this goes on the more suspicious I become. Good, honest, small business owners like ourselves demand better from our politicians.
I agree with Gregmax and Angry Risk Adviser. What a joke.I month to consider the legislation. Do these people actually live in the real world of Financial Advice.?? Kelly, what you need to be doing is to separate the Banks from their distribution arms. I am totally over the Banks attacking my clients and offering them some sort of sweet heart deals with their Insurances. What a nest of Vipers. Unbelievable.!! I`m afraid I can only trust the Banks as far as I can throw them.
is it really one month? There’s Christmas and New Years in between. Timed perfectly for the coup as far as I’m concerned.
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