LIF transition needs support network
The most effective method to adapt to new commission structures under the life insurance framework (LIF) is to showcase advisers who have already transitioned to newer models and demonstrated the models work, according to the Association of Financial Advisers (AFA).
In a media briefing at the AFA 2016 National Adviser Conference in Canberra last week, new national president, Marc Bineham, said many of the younger advisers had already adapted their businesses to a fee-for-service model with no commissions, or a combination of both.
"We've been addressing this for a number of years now, where we've actually had, an older adviser, an experienced adviser like myself, who have gotten up on stage and said this is what we do and then we've employed a younger adviser and said we're now going to have to charge a fee for that," Bineham said.
"They say, ‘yeah, that's fine', and the client is fine because they actually understand that if you do the work and you provide the value, charging a fee is not a problem."
Bineham said he also found it difficult to charge clients a fee after never having done so for 28 years.
"But the client had no problem with it. It was me. Not the client," he said.
Advisers would find it valuable to hear anecdotal evidence from other advisers to see first-hand what did and did not work for them, he said.
"To me that will be the easiest way to get the message: when you see other advisers have adapted, well, if they can do it, why can't I?"
The message came the day after the AFA held an extraordinary general meeting (EGM) on 6 October, where a vote was held to change the association's constitution to force it to oppose all LIF legislation for three years.
The AFA won with a clear mandate to leave the constitution unchanged.
AUTHOR
Malavika Santhebennur
Recommended for you
ASIC has issued infringement notices to two AFSLs over financial advisers providing personal advice while they were unregistered.
Australian retirees could increase their projected annual incomes by as much as 51 per cent through comprehensive financial advice, according to a Vanguard study, but cost continues to be an issue.
AMP has announced a senior appointment to its North leadership team, reinforcing the firm’s commitment to the advice industry.
Despite the financial adviser exam being rooted in ethics, two professional year advisers believe the lack of support and transparency from the regulator around the exam is unethical.
