The Council of Australian Life Insurers says the Government needs to act now to implement changes that will allow more consumers to access much-needed life insurance advice.
In noting Australians can’t wait any longer for the reforms contained in Tranche 2 of the Government’s Delivering Better Financial Outcomes legislation package to be implemented, CALI CEO, Christine Cupitt, says without these changes, millions of Australians and their families are being left behind and not able to access the information that they need to make informed choices about their financial safety nets.
At pains to differentiate the nature of the advice services envisaged to be delivered by life company staff following the implementation of the Tranche 2 DBFO reforms, Cupitt emphasised the role insurers want to play is very different to what CALI views as the critically important services financial advisers already provide.
“We’re not here to get in the way of the important work advisers are doing,” says Cupitt, adding that for life insurers, “…this is about providing basic customer service, such as being able to answer questions and provide simple scaled advice about our own products to people who ask for it at no additional cost to them.” (See also: CALI Reinforces Complementary Risk Advice Agenda.)
What is causing concern for Cupitt and for CALI, however, is the delay that has emerged in the Treasury’s release of an exposure draft of Tranche 2 of the proposed DBFO legislation ahead of its introduction into parliament.
She says any further delay in passing Tranche 2 of the DBFO reforms, which includes allowing a new class of advice to be implemented, won’t just hurt today but will lead to a chain reaction of financial uncertainty over generations.
Cupitt will be in Canberra this week to meet with Minister Jones and other federal MPs to further clarify CALI’s views on the critical need for the advice reforms to be legislated before the next election.
…there is this huge unmet advice need
“We’ve been really clear that Australians and their families just can’t wait any longer for this – that there is this huge unmet advice need. We’ve got a growing underinsurance problem. We know that there are approximately 3.4million Australians who are underinsured for basic income protection needs and that problem is only growing in the absence of access to choice around financial advice.”
Cupitt notes CALI’s position is informed both anecdotally, by the nature of the daily enquiries made directly to all insurers by Australian consumers, but also by research stemming from its quarterly Life Insurance Sentiment Tracker research, recent findings from which have revealed:
- More than 40 per cent of Australians want advice that is more personalised and helps them make a decision about how much cover they need and the products that are suitable for them
- Less than a quarter of people say they want basic information only
Cupitt says these research findings demonstrate how critical the Government’s DBFO legislation will be to giving Australians the kind of advice they want, when and where they want it. She says under the proposed reforms, this is the kind of advice life insurers would be able to give their customers when they ask for it, at no extra cost to them.
