The Council of Australian Life Insurers has welcomed the passage of the first tranche of the Government’s Delivering Better Financial Outcomes reforms.
CALI says The Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024 will give Australians more choice when it comes to getting advice about their life insurance needs.
“It will also back-in the vital work of financial advisers across the country and help reduce red tape.”
CALI CEO Christine Cupitt says the Bill’s passage is a good first step to helping address the advice accessibility crisis in Australia.
The organisation says independent research it commissioned shows that in the past three months more than a quarter of Australians have considered getting financial advice on life insurance but haven’t acted on it. Just 8% have received it in the same time frame.
CALI says a third of people who did receive advice on life insurance got it from their family and friends “…demonstrating that the cost of advice remains too high and more needs to be done.”
“We want to see legislation that allows life insurers to provide simple advice on their own products, when customers ask them to,” Cupitt says.
In announcing the passing of the first tranche of the legislation, Minister for Financial Services, Stephen Jones, noted the Bill implements reforms which reduce unnecessary red tape that adds to the time and cost of preparing financial advice without providing consumer benefits.
…there are significant improvements to pain-points in the delivery of financial advice…
He says there are “…significant improvements to pain-points in the delivery of financial advice,” noting the legislation will:
• Streamline fee documentation into one simplified document
• Enable flexibility in how financial services guides are provided
• Strengthen transparency and protections for consumers who receive personal advice about insurance products
Jones says the government welcomes the constructive engagement with stakeholders and responded to feedback received on the legislation.
“The legislation clarifies that Australians can use their superannuation accounts to pay for personal financial advice about their superannuation from an independent financial adviser. Superannuation funds will continue to satisfy their current obligations that govern the usage of member funds.”
He says the amendments to the Bill facilitate the passage of the first tranche immediately, maintain consumer protections, and support access to financial advice for the five million Australians at, or approaching, retirement.
…the second tranche of reforms will further increase access and affordability of financial advice …
Jones says the second tranche of reforms will further increase access and affordability of financial advice and will be developed over the second half of the year.
“This includes the government’s commitment to reform statements of advice, modernise the best interests duty and remove the safe harbour steps, and increase the provision of advice by financial institutions.”
