Poll Results – Back to the Future?

Most advisers support the Government’s decision to initially adopt 14 of the 22 recommendations stemming from the Quality of Advice Review.

As we go to press, three quarters of those voting in our latest poll have given their thumbs-up to Minister Jones’ announcement early last week, and it appears most industry stakeholders are on the same page with their support (see: Industry Groups Generally Welcome QoA Review Decisions).

Back to the Future?

One intriguing thread of conversation has emerged in the aftermath of the Minister’s announcement, however, based on confirmation the Government will support the expansion of the provision of personal advice by superannuation funds to their members. In light of this confirmation, the Council of Australian Life Insurers (CALI), released a statement which included a call to the Government to extend this equivalent process to life insurance companies and their policy holders. It said:

CALI believes it is important that Government legislation also allows life insurers to provide limited advice to Australians directly when they ask for it. Like superannuation trustees, life insurers have additional legal duties to act in good faith and prioritise the interests of their customers.

The Government seems sufficiently comfortable with the notion that staff employed by superannuation funds – given today’s consumer protections enshrined in the Future of Financial Advice and Life Insurance Framework reforms amongst others – will be in a position to deliver quality, affordable and unconflicted advice in the best interests of super fund members. But will the Government extend that same thinking to policy holders of life companies? If it does, this means that life companies will have the opportunity to employ staff to deliver (limited) personal financial advice to that insurer’s policy holders.

there’s …an echo of the past in the idea that insurers may soon have the potential to hire staff to deliver limited personal life insurance advice

While the ‘tied agency’ system no longer exists in Australia, there’s nonetheless an echo of the past in the idea that insurers may soon have the potential to hire staff to deliver limited personal life insurance advice directly to policy holders when asked.

While such a move might be greeted with outrage by some consumer groups, many within the financial services industry would support the idea, as it would deliver much-needed personal life insurance advice to the significantly under-served market and contribute at the same time to addressing the the ever-shrinking pool of specialist life insurance knowledge within the sector.

Such employed staff may then serve to become a source of the next generation of specialist risk advisers whose career path may see them ‘cut their teeth’ as salaried life company employees before transitioning to become the independent risk specialist advisers of the future.

In the meantime, our poll remains open for another week and we welcome your thoughts…