{"id":57168,"date":"2021-08-24T13:42:32","date_gmt":"2021-08-24T03:42:32","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=57168"},"modified":"2024-10-30T08:44:46","modified_gmt":"2024-10-29T22:44:46","slug":"lower-adviser-numbers-adds-to-taxpayer-burden","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2021\/08\/24\/lower-adviser-numbers-adds-to-taxpayer-burden\/","title":{"rendered":"Lower Adviser Numbers Compound Taxpayer Burden"},"content":{"rendered":"<p>Fewer advisers will place a greater burden on Australia\u2019s welfare system, according to MetLife\u2019s Chief Distribution Officer <strong>Michael Mulholland<\/strong>.<\/p>\n<p>In discussing the value of life insurance Mulholland says the reducing number of advisers means less life insurance and hence a greater burden on Australia\u2019s welfare system.<\/p>\n<p>He says a lack of advisers is an issue for the industry, the economy and society at large.<\/p>\n<figure id=\"attachment_57197\" aria-describedby=\"caption-attachment-57197\" style=\"width: 180px\" class=\"wp-caption alignright\"><a href=\"https:\/\/riskinfo.com.au\/news\/files\/2021\/08\/michael-mulholland-e1629771754886.jpeg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-57197\" src=\"https:\/\/riskinfo.com.au\/news\/files\/2021\/08\/michael-mulholland-e1629771754886.jpeg\" alt=\"\" width=\"180\" height=\"216\" \/><\/a><figcaption id=\"caption-attachment-57197\" class=\"wp-caption-text\">Michael Mulholland&#8230;normal working mums and dads are really going to need advice and cost-effective advice; and we need people to deliver that&#8230;<\/figcaption><\/figure>\n<p>In July the insurer released its <a href=\"https:\/\/www.metlife.com.au\/content\/dam\/metlifecom\/au\/thoughtleadership\/All\/Value-of-Life-Insurance-Report_20210622.pdf\" target=\"_blank\" rel=\"noopener\"><em>Value of Life Insurance Report<\/em>,<\/a> which Mulholland explains includes a section highlighting the benefits of life insurance to taxpayers.<\/p>\n<p>He told <em>Riskinfo<\/em> the latest Federal budget papers reveal that in 2021-22 social security and welfare remains the largest budget item at $210 billion or 35.6 percent of the total budget.<\/p>\n<p>Other points highlighted in the report include:<\/p>\n<ul>\n<li>Rice Warner calculates that under-insurance costs the Government $57 million for life insurance, and $1.26 billion for TPD. People without life cover or who are under-insured are more likely to draw on welfare payments, increasing costs to taxpayers<\/li>\n<li>At present, there are approximately 750,000 people receiving disability benefits in Australia with the Government paying out $16.5 billion annually<\/li>\n<li>Life insurance provides an alternative, self-funded source of support for people and therefore can have a direct impact by reducing welfare costs.<\/li>\n<li>One of the knock-on effects of rehabilitation services provided by life insurers is the reduced burden on Government to provide social security and other Government funded support services<\/li>\n<\/ul>\n<p>Mulholland says on top of this, Australia is dealing with a global pandemic and the estimated mental health bill of $60 billion cited in the report is only going to rise.<\/p>\n<blockquote><p>&#8230;the key message he hears from advisers is the need to demonstrate the value of life insurance&#8230;<\/p><\/blockquote>\n<p>He says the lack of advisers and the slow decline in numbers over some years has started to accelerate, to the point where there are not enough advisers. With fewer advisers he says the government and taxpayer will ultimately fund the increasing welfare burden.<\/p>\n<p>\u201cNormal working mums and dads are really going to need advice and cost-effective advice; and we need people to deliver that,\u201d said Mulholland.<\/p>\n<p>He told <em>Riskinfo <\/em>that the key message he hears from advisers is the need to demonstrate the value of life insurance.<\/p>\n<p>Mulholland says advisers see the value life insurance delivers to their clients and \u201c\u2026this report is the first stage of getting the facts and figures and dataset to make informed decisions going forward and help Australians get proper advice.\u201d<\/p>\n<p>He adds a part of that is rebuilding the pool of financial advisers and for businesses to recruit a new generation of financial advisers.<\/p>\n<p>\u201cAnd that means looking at the economics of the business model.\u201d Whether they are paid by commissions or through fees for service, advisers need to be paid for the work they do.<\/p>\n<blockquote><p>&#8230;it\u2019s \u201cincredibly important\u201d advisers are supported and their business models supported<\/p><\/blockquote>\n<p>He says it\u2019s \u201cincredibly important\u201d advisers are supported and their business models supported to ensure businesses can replenish their numbers, noting that recruitment and training costs money, as does the need to ensure new advisers are fully compliant.<\/p>\n<p>Asked what MetLife itself is doing he points to <a href=\"https:\/\/www.metlife.com.au\/content\/dam\/metlifecom\/au\/thoughtleadership\/All\/Value-of-Life-Insurance-Report_20210622.pdf\" target=\"_blank\" rel=\"noopener\"><em>The Value of Life Insurance Report<\/em> <\/a>being part of its contribution along with services such as its <a href=\"https:\/\/www.metlife.com.au\/360health\/\" target=\"_blank\" rel=\"noopener\">360Health<\/a> service offer.<\/p>\n<p>The insurer says it is also talking to regulators, the Government and industry bodies ensuring the message gets out.<\/p>\n<p>Mulholland notes that insurers across the industry are all in agreement that there are not enough advisers coming through and, whether it be through commissions or fee-for-service, advisers need to be paid appropriately to be able to recruit new advisers.<\/p>\n<p>\u201cIt is not for us to preach what the best form of payment is. We just want to make sure that advice is not only cost effective for clients; but is sustainable for the financial planning practice itself.\u201d<\/p>\n<p>So what will happen if we continue to see fewer advisers and greater levels of under insurance?<\/p>\n<p>Mulholland says it means more welfare and disability payments that Government needs to cover and as we come out of the pandemic there are going to be societal impacts.<\/p>\n<p>He states that life insurance is the bedrock of financial services. \u201cIt\u2019s a core service we are talking about here\u201d and to expand it further, \u201c\u2026we need lots of advisers to service the working people of Australia.\u201d<\/p>\n<p><a href=\"https:\/\/www.metlife.com.au\/content\/dam\/metlifecom\/au\/thoughtleadership\/All\/Value-of-Life-Insurance-Report_20210622.pdf\" target=\"_blank\" rel=\"noopener\">Click here<\/a> to download the <em>Value of Life Insurance Report<\/em>.<\/p>\n<p><a href=\"https:\/\/www.metlife.com.au\/content\/dam\/metlifecom\/au\/thoughtleadership\/All\/Value-of-Life-Insurance-Report_20210622.pdf\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-57200\" src=\"https:\/\/riskinfo.com.au\/news\/files\/2021\/08\/value-of-life-insurance.png\" alt=\"\" width=\"440\" height=\"596\" srcset=\"https:\/\/riskinfo.com.au\/news\/files\/2021\/08\/value-of-life-insurance.png 440w, https:\/\/riskinfo.com.au\/news\/files\/2021\/08\/value-of-life-insurance-221x300.png 221w, https:\/\/riskinfo.com.au\/news\/files\/2021\/08\/value-of-life-insurance-310x420.png 310w\" sizes=\"auto, (max-width: 440px) 100vw, 440px\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Fewer advisers will place a greater burden on Australia\u2019s welfare system, according to MetLife\u2019s Chief Distribution Officer Michael Mulholland. In discussing the value of life insurance Mulholland says the reducing number of advisers means less life insurance and hence a greater burden on Australia\u2019s welfare system. He says a lack of advisers is an issue [&hellip;]<\/p>\n","protected":false},"author":24,"featured_media":57202,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,270],"tags":[],"class_list":["post-57168","post","type-post","status-publish","format-standard","has-post-thumbnail","category-company-news","category-remuneration"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/57168","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=57168"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/57168\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/57202"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=57168"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=57168"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=57168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}