{"id":63199,"date":"2022-10-25T11:55:47","date_gmt":"2022-10-25T01:55:47","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=63199"},"modified":"2025-03-14T12:02:25","modified_gmt":"2025-03-14T01:02:25","slug":"simplify-risk-advice-to-insure-million-more-aussies","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2022\/10\/25\/simplify-risk-advice-to-insure-million-more-aussies\/","title":{"rendered":"Simplify Risk Advice to Insure Million More Aussies"},"content":{"rendered":"
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Many Riskinfo readers were interested this week in NMG Consulting’s take on the impact it says a scaled advice model – and other reforms to simplify advice – would have on the number of Aussies eventually holding life insurance cover…<\/h3>\n<\/div>\n<\/div>\n

The combined effect of simplification of comprehensive advice and the introduction of a scalable advice model for life insurance would see a million more Australians with life insurance cover, according to new research released by the Financial Services Council.<\/p>\n

The council says that research by NMG Consulting has found that if the Quality of Advice Review results in the implementation of a scaled advice model and other reforms to simplify advice \u201c\u2026there will be a 12% increase in the number of Australians with life insurance cover, or 432,000 Australians. This is relative to a decrease in life cover for 612,000 Australians under the \u2018do nothing\u2019 approach.\u201c<\/p>\n

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Blake Briggs…the Government has a rare opportunity to deliver affordable and accessible advice.<\/figcaption><\/figure>\n

The FSC commissioned NMG Consulting to analyse under-insurance in Australia and to model three scenarios, including one in which the FSC\u2019s reformed advice framework was adopted in conjunction with a simplified advice model that allows for scaled advice to assess cover required beyond default cover levels.<\/p>\n

It says that proposals to reform the advice framework will reduce the cost of providing advice by almost $2000, while maintaining commissions, “…allowing people to get advice at times when they need life insurance protection but cannot afford an up-front fee to pay for it.\u201d<\/p>\n

CEO of the FSC Blake Briggs<\/strong> says the Government has a \u201crare opportunity\u201d to deliver affordable and accessible advice to consumers as an outcome of the Quality of Advice Review (see: Clarifying Purpose of the QoA Review<\/a>).<\/p>\n

He notes that the council\u2019s research shows \u201c\u2026how the unmet life insurance needs of consumers can be addressed by comprehensively reforming the regulatory framework, not just tinkering with it.”<\/p>\n

…If nothing changes, the number of life insurance policies held by Australians is set to reduce by 17% in the next five years…<\/p><\/blockquote>\n

\u201cIf nothing changes, the number of life insurance policies held by Australians is set to reduce by 17% in the next five years, leaving Australians without cover when they need it.”<\/p>\n

Briggs says these insights also suggest the benefits that a reformed financial advice framework can have \u201c\u2026across the broad range of financial services that consumers must navigate, from superannuation savings, to investing for the future for themselves and their families.\u201d<\/p>\n

In its submission to the Quality of Advice Review, the FSC advocated for a comprehensive reform of the advice framework \u201c\u2026that has largely been reflected in Michelle Levy\u2019s proposed \u2018Good Advice\u2019 framework released for consultation in the Review\u2019s Proposals Paper.\u201d<\/p>\n

It says these reforms will reduce the cost of providing advice and include:<\/p>\n