The Council of Australian Life Insurers has renewed its call for the returned Labor Government to act now to close the gap between demand and delivery of financial advice, where one of the most critical areas of concern applies to younger Australians.
CALI’s call stems from its latest research, just released, which reveals the significant extent to which younger Australians are effectively being shut-out from accessing life insurance advice under current regulatory, economic and industry conditions (see: Young Aussies Shut Out of Risk Advice).
One of the key elements, according to CALI CEO, Christine Cupitt, which can contribute to finding a solution that will allow more young Aussies to receive life insurance advice is the expansion of limited advice offerings through what the Government refers to as the new class of adviser.
According to Adviser Ratings data in 2024, just 532 advisers wrote 50% of new business, with only 15,600 registered advisers in total:
A new class of adviser would complement the work of advisers who are already providing comprehensive advice…
“We need to make it easier for Australians to get financial advice from qualified professionals, as well as be able to provide the kind of service our customers rightly expect from insurers. A new class of adviser would complement the work of advisers who are already providing comprehensive advice and help close Australia’s advice gap,” said Cupitt.
Former Assistant Treasurer, Stephen Jones, committed the Government to creating a new class of adviser in March this year prior to his departure from politics at the Federal Election.
While he conceded its vital importance in allowing life insurers, AFSLs and others to expand the supply of quality and affordable advice to consumers, part one of the second tranche of the Government’s Delivering Better Financial Outcomes (DBFO) reform package did not include draft legislation for its new class of adviser (see: SoAs Out, CARs Back to the Future). Instead, it focussed on:
- Replacement of the Statement of Advice with a Client Advice Record
- Providing clear rules on what advice topics can be collectively charged for via superannuation
- Allowing superannuation funds to provide targeted prompts to members to drive greater engagement with superannuation at key life stages
Lending weight to CALI’s call for the Government to act are research findings in its Life Insurance Sentiment Tracker June 2025 Report which revealed, among a number of concerning statistics, that 59% of career starters aged 18-34 have considered and/or received advice on life insurance in the past three months, but have turned to family, friends or social media for that advice.
…action is needed now to close the gap between demand and delivery of financial advice
“We need to be able to offer affordable, timely and personalised support. That’s what the Government’s advice reforms are all about, and it’s critical they stay on track,” said Cupitt, adding that while CALI welcomes the Government’s commitment to reform, action is needed now to close the gap between demand and delivery of financial advice.
Riskinfo will report further developments around the delivery of part one of Tranche 2 of the Government’s DBFO reforms, together with news from the office of incoming Financial Services Minister, Daniel Mulino, on the intended timing of the release of future draft legislation which includes its new class of adviser proposition.
This is another reason why Life Insurance commission rates MUST be increased to their pre LIF levels, i.e. 80/20 at least. More Australians will then be able to access quality Life Insurance advice without having to pay a fee to their adviser and an insurance premium. That means that people like Chris Unwin should never have pushed his nonsense that people will pay an adviser fee and a premium.
The merry go round continues and seems to always end up at the same stop of vested interest and incompatible mumbo jumbo that never passes the commonsense test.
How many times must we repeat the same solution which will fix the current impasse of incompetence, yet still our leaders ignore common sense, while preaching ideology from the pulpit that does not solve anything, except within their own cloistered walls that benefits them, while pointing the middle finger at everyone else.
If the Life Insurance Companies truly want to grow and future proof their Businesses, then the answer has ALWAYS been staring them in the face, which they have been repeatedly told and ignored this sage advice.
The solution has always been to make it attractive enough for all the thousands of Advisers to bring on risk only Advisers into their practices, or refer to risk only specialists to look after their clients needs.
Under this current framework, it has been a TOTAL FAILURE.
There has been thousands of risk Advisers leave the Industry and virtually NIL new entrants that specialise in risk, come into the Industry, because it is too hard.
Until the pulpit preachers start seeing the bleeding obvious, then nothing positive will come from their constant talk fests as none of them have seen the light.
I'm sure if we keep adding compliance hoops to jump through, onerous requirements to continue doing your job and diminishing commissions that we will see an increase in affordable advice and new advisors. Any day now.
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