FSC direct insurance carve-out calls condemned

AFA/FSC/LIF/

22 June 2016
| By Malavika |
image
image
expand image

The Association of Financial Advisers (AFA) is looking to close the loophole that allows a carve-out for direct insurance sales that excludes it from the Life Insurance Framework (LIF), and has refuted the Financial Services Council's (FSC's) continued calls to seek a carve-out.

In a letter to members this week, AFA president, Deborah Kent, said that disappointingly, the FSC was continuing to campaign for a carve-out despite the Minister agreeing that there would be no carve-out for direct sales channels in November 2015.

In its feedback on the Exposure Draft Legislation and Explanatory Memorandum for the Corporations Amendment (Life Insurance Remuneration Arrangements) Bill 2015, the FSC stated in its submission to the Treasury in December 2015 that more consultation was required to avoid unintended outcomes on direct life insurance distribution models.

"We see this behaviour from the FSC as unacceptable given the thoroughness of the negotiations and that the Minister had already publicly confirmed that LIF would apply to direct insurance," Kent said in the letter.

She said the AFA Board wanted to see this loophole closed before legislation and regulation was put into effect by the next government.

Kent reiterated the point made by others before her and warned advisers that none of the major parties had indicated that the LIF outcome would favour them more than the current form of LIF.

"Depending on which party forms power after the election, LIF may continue substantially in its current form, or it may not," she said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 4 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 4 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

1 week 5 days ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

2 weeks 4 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

3 weeks 2 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND