CALI Reinforces Complementary Risk Advice Agenda


In continuing to advocate for life insurers to provide simple advice on their own products, CALI has restated that insurers only seek to complement the important and valuable work advisers already undertake “…not get in their way.”

In a statement to the Senate Economics Legislation Committee hearing on the Delivering Better Financial Outcomes and Other Measures Bill CALI CEO Christine Cupitt said the council wants to see “…legislation introduced that allows life insurers to provide simple advice on their own products, when customers ask them to.”

She said this should only happen with appropriate limitations and strong consumer protections.

Christine Cupitt …financial advisers do an incredible job helping Australians with personalised and holistic financial plans

As Riskinfo reported earlier this month CALI had confirmed its position on the minimum educational qualification required for employed life company staff who will be providing limited financial advice (see: CALI Confirms Minimum Qualification).

At the senate committee hearing Cupitt said for people whose needs are more complicated “…life insurers will continue to put them in contact with financial planners who can give them broader advice that compares products across the market.”

But, she said “….for more simple matters that relate to one life insurer’s products alone and where people can’t afford or don’t want a holistic plan, we want to give Australians extra choice at no cost to them.”

…this will be very different to the role of financial advisers…

She said this will be very different to the role of financial advisers. “We only want to complement the important and valuable work they do, not get in their way.”

Cupitt noted earlier in her address to the committee that there is an “…advice accessibility crisis in Australia.”

The Delivering Better Financial Outcomes and Other Measures Bill will help expand Australians’ access to advice and back-in the vital work of financial advisers across the country.”

She added that getting professional advice on life insurance can cost more than $3,000 and that independent research commissioned by CALI found that seven in 10 Australians are concerned about the impact of cost of living when it comes to taking out, or continuing to pay, for life insurance.

In the past three months alone more than a quarter of Australians have considered getting financial advice on life insurance but haven’t acted on it, and just 8% had received advice in the same time frame.

Cupitt said financial advisers “…do an incredible job helping Australians with personalised and holistic financial plans. But there aren’t enough of them, with just 1,000 nationally who regularly help people navigate life insurance products.”


  1. Paul Keating once said “never stand between a State Premier and a dollar”. The same applies to life insurance companies, all of which, except one, are now shareholder driven. As a consequence, the long-term thinking that used to be part of running a life insurance company has been replaced by what might happen next week to the share price, and the CEO bonus.
    Let’s look at the issues raised by CALI: –
    • I might be out of touch, but a $3000 fee purely for life risk advice with no investment advice component would encounter a lot of resistance with my clientele. Where is this figure come from? Is it a no commission fee?
    • Yes, there is an advice access crisis in Australia. That’s what happens when a body like the FSC acts in the interests of one of its constituent member groups (banks) to attack self-employed, small business advisers. The banks funded FASEA for $11.5 million. Why? The banks dreamt up LIF and sold it to an anti-small business Coalition government as a consumer benefit. Those measures were anti-competitive, yet the ACCC were never asked for an opinion. 25,000 advisers to 15,000 advisers in three years. Worked like a charm.
    • CALI says don’t worry, it’s only about “simple” advice. Trust us, we are a group of shareholder-driven life insurance companies. That doesn’t pass anyone’s pub test, particularly when there is no mention of the definition of “simple” advice.
    • Behind our backs, our “friends”, the life insurers, seeking to keep LIF going for at least another couple of years, have been lobbying Mr Jones. They looked across the table at the industry funds and said “we want some of that” i.e. the capacity to provide “simple” advice without advisers.
    • Remember these are the same life insurers that right now are seriously engaged in reducing staff in underwriting, new business and claims, just to keep that share price up.
    • The real objective appears to be that the life insurers want to reduce the numbers of disgruntled policyholders in the policy departure lounge while retaining some revenue. You know – the folks who been the subject of systemic gouging of premiums in the last 5 years. At the end of the day that can only be achieved in one of two ways: convince the policyholder to reduce the sum insureds (personal advice) or offer a contract without underwriting that has so much restriction of contractual-right-to-claim that it represents “rubbish insurance”. Slightly reduced revenue, much less liability.
    • How will the life insurers be contacting our clients? Will they only talk to ringing those clients who call insurers and threaten to cancel policies because of ever-increasing rising premiums. OR will they be using their database to look at some of my clients whose premiums have increased by a certain amount over a certain period i.e. 25% increase over the last two years. Will the life insurers be consulting advisers who introduced those clients?
    • What about lapses? Let’s say there’s a client with a policy 18 months old he’s a little disgruntled on the matter of premiums. He contacts the insurer and they say we have a deal for you: you can keep the sum assureds, there will be no underwriting, and we will save you 30% on your current premiums, IF you agree to swap your existing policy with this special deal. The insurers have a track record of developing rubbish products without underwriting: Westpac created a product for St George that had so many pre-existing condition clauses it wasn’t insuring anything in particular.
    • If that policy is a LIF policy, it has at least 6 months remaining on its responsibility period. Who trusts life insurers not to lapse that policy and execute a claw-back on the adviser, arguing that the client made the decision, and best of all, that it’s in the best interests of the client.
    • We are being absolutely “snowed” on the qualification of those advisers providing “simple” advice to customers of the life insurer. It’s now very clear these people will not be educated and qualified to the standard of the advisers on the FAR. Some suggest that these advisers will in fact be just employees, not licensed in any way on an individual basis. Will these so-called advisers be subject to FASEA.

    Insurance has always had to be sold. It’s not a purchase that most people volunteer to do. The sale of Life insurance requires a relationship, and that relationship has always been, and will always be, between adviser and client. Relationships are built on trust. Trust is earned and our friends the life insurers, on this their latest escapade, are starting behind the barrier, with weight in the saddle.

    A long career tells me that trusting life insurers to always do the best thing is a risky proposition.

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