{"id":79514,"date":"2025-10-06T12:33:25","date_gmt":"2025-10-06T01:33:25","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=79514"},"modified":"2025-10-10T14:11:07","modified_gmt":"2025-10-10T03:11:07","slug":"general-advice-may-be-a-ticking-time-bomb","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2025\/10\/06\/general-advice-may-be-a-ticking-time-bomb\/","title":{"rendered":"General Advice – Part of Underinsurance Solution or ‘Ticking Time Bomb’?"},"content":{"rendered":"
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Our report on the recent AIA Australia Round Table debate about expanding the use of general advice to tackle Australia\u2019s underinsurance problem drew strong interest from readers this week…<\/h3>\n<\/div>\n<\/div>\n

Key industry stakeholders have debated the merits of embracing general advice as part of the solution to the underinsurance dilemma, with opinion divided between qualified support and significant concern.<\/p>\n

In discussing the current and future role of general advice as it applies to life insurance solutions, panellist opinion at the recent AIA Australia Round Table<\/a> was varied.<\/p>\n

A \u201cticking time bomb\u201d is how the CEO of Skye Wealth<\/a>, Phil Thompson<\/strong>, described the general advice (GA) model during the discussion. He told his peers he fears it risks harming all advisers, if and when consumers start complaining about the advice given by the general advice cohort.<\/p>\n

\u201cI personally don’t love it,\u201d he said. \u201cI think it’s questionably legal.\u201d<\/p>\n

He reminded panellists of a 2021 High Court decision held that advice given to 14 Westpac customers \u2013 that they move their super funds into one of the bank\u2019s funds \u2013 was personal advice and not, as Westpac had argued, general advice.<\/p>\n

A lot of advisers have transitioned into this GA model, that feels like a ticking time bomb.<\/p><\/blockquote>\n

\u201cThat court case hinged on consumers making the assumption there was personal information being taken into account [for the bank] to make the recommendation,\u201d said Thompson.<\/p>\n

\"Phil
Phil Thompson<\/figcaption><\/figure>\n

“A lot of advisers have transitioned into this GA model, that feels like a ticking time bomb.”<\/p>\n

He said if the proposed general advice model does blow up, it’s going to be due to “…advisers moving policies and chasing commissions”.<\/p>\n

“We’re all going to be painted with that same brush,” he said.<\/p>\n

\u201cIf insurers can sell their own products direct then we may not actually need general advisers,” he added.<\/p>\n

Demand for advice<\/strong><\/p>\n

Nevertheless, others taking part in the Round Table indicated that general advice could help meet the demand for advice.<\/p>\n

Bombora Advice<\/a> MD Niall McConville<\/strong> said that while personal advice remains the ideal, the lack of advisers means many consumers are not getting any advice at all.<\/p>\n

\"Niall
Niall McConville<\/figcaption><\/figure>\n

\u201cWe understand that if you can provide personal advice to a customer that’s the best outcome you can get,\u201d he said.<\/p>\n

\u201cBut we also understand there is nowhere near enough advisers to speak to all the people who need some sort of advice.”<\/p>\n

He said banks write between $500m and $600m of new home loans every year, and that many borrowers would normally have their mortgages covered with life insurance, “…they\u2019ve not gone away”.<\/p>\n

\u201cWe would be supportive of general advice,” he said. “I think the key is the environment that it’s provided in.”<\/p>\n

However, he said that if advice drifts from general to personal, then that\u2019s when issues can surface.<\/p>\n

…General advice is a requirement that should be served…<\/p><\/blockquote>\n

MBS Insurance<\/a> partner and CEO, Drew Burden<\/strong>, agreed general advice can help serve middle Australia, but cautioned that strong safeguards need to be in place.<\/p>\n

\"Drew
Drew Burden<\/figcaption><\/figure>\n

\u201cIf someone says I need a million dollars worth of life insurance, and the adviser doesn’t say anything, they then walk into implied advice,” he said.<\/p>\n

\u201cIf you are going to enter the world of general advice you need to be really clear around monitoring supervisions. I think it’s a completely different proposition to personal advice.<\/p>\n

\u201cPeople having access to general advice is better than not having access to advice.\u201d<\/p>\n