{"id":60709,"date":"2022-05-03T11:30:28","date_gmt":"2022-05-03T00:30:28","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=60709"},"modified":"2024-10-30T08:43:45","modified_gmt":"2024-10-29T22:43:45","slug":"election-2022-who-will-deliver-for-your-clients","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2022\/05\/03\/election-2022-who-will-deliver-for-your-clients\/","title":{"rendered":"Election 2022: Who Will Deliver For Your Clients?"},"content":{"rendered":"

As Australians head to the polls this month, one of the key questions advisers need to ask is not just which side of politics will deliver good outcomes for the profession, but also which will deliver for clients, says Synchron’s Don Trapnell.<\/strong><\/p>\n

Trapnell says the industry has had years of financial services reform, ongoing reviews and inquiries into financial advice, and what he refers to as a never-ending series of complicated changes to advice regulation and legislation:<\/p>\n

\u201cThis has been the legacy of both Labor and Coalition federal governments \u2013 but what we have today as a result is potentially hundreds of thousands of people missing out on advice because there are not enough advisers to go round or because advice is too expensive, or both. That\u2019s a huge concern.\u201d<\/p>\n

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Don Trapnell…one side of politics or the other, preferably both, should now publicly support the fact that commissions will help consumers afford life insurance advice…<\/figcaption><\/figure>\n

Trapnell says there are some fixes that an incoming Government could introduce to turn things around, perhaps even quite quickly, and when going to the polls, advisers could consider how likely, or otherwise, the Liberal National Coalition (the Coalition) or the Australian Labor Party (ALP) might be to implement them.<\/p>\n

First – Commissions
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\u201cFirst of all, an incoming Government could immediately and formally recognise that commissions are a legitimate and affordable form of remuneration for life insurance advice and commit to leaving well enough alone,\u201d he says.<\/p>\n

\u201cWe have heard encouraging words to that effect from both sides of politics \u2013 including Liberal MP Bert van Manen<\/strong>, and, most recently, Labor\u2019s Stephen Jones<\/strong>. However, both sides say they\u2019ll wait for the Quality of Advice Review<\/em> and take it from there. That\u2019s not commitment.\u201d<\/p>\n

Trapnell also says the Quality of Advice Review<\/em> follows on from the Life Insurance Framework (LIF)<\/em>\u00a0 and that Synchron believes LIF was predicated on a lie.<\/p>\n

\u201cThe lie was that a culture of churn existed amongst advisers when there was very little evidence of it. One side of politics or the other, preferably both, should now publicly support the fact that commissions will help consumers afford life insurance advice.\u201d<\/p>\n

Separate Risk Advice from Financial Advice<\/strong><\/p>\n

Trapnell says another progressive step would be to separate risk advice from financial planning advice.<\/p>\n

\u201cAt the risk of sounding like a broken record… risk advice is specialist advice centred around protecting wealth with life insurance, while financial planning is a broader approach.”<\/p>\n

He says that as specialists, risk advisers should therefore not be subject to the same broad education requirements as financial planners. \u201cAfter all, mortgage brokers are permitted to specialise in mortgage advice and are not compelled to study financial planning,” he says.<\/p>\n

…which political party will take the blinkers off and recognise this?…<\/p><\/blockquote>\n

\u201cWhich political party will take the blinkers off and recognise this? If they did, many more advisers could stay on in the profession, meaning many more consumers could access affordable life insurance advice.\u201d<\/p>\n

Trapnell also notes the current Government\u2019s election promise to continue helping small businesses to create jobs, by supporting those that are investing in skills, and asked if this support will be extended to those financial advice businesses that take on new graduates and support them in their Professional Year, \u201c\u2026so that we can rebuild a workforce to serve the financial advice needs of Australians, a workforce that successive Government \u2018reforms\u2019 have decimated. If not, why not?\u201d<\/p>\n

Trapnell has similar questions in relation to election promises from the ALP, including its commitment to \u2018Drive a genuine collaboration with small businesses and government to reduce the time small businesses spend doing taxes, cut paperwork and target support’.<\/p>\n

He says if regulation wasn\u2019t so complex, advice could be delivered much more efficiently, driving down costs and therefore making it more affordable for more consumers.<\/p>\n

Trapnell believes these are just some of the questions advisers could consider when going to the polls. \u201cIt\u2019s not just about the future of the profession, it\u2019s also about the financial future of Australians.\u201d<\/p>\n

Next Parliament Must Provide Certainty for Financial Advisers <\/strong><\/p>\n

Meanwhile, the FPA says that the next Australian Parliament must provide certainty to the financial planning profession on issues such as:<\/p>\n