Advisers urged to lobby against clawback
The three-year responsibility period under the clawback provisions of the Life Insurance Framework (LIF) would be like asking politicians to pay back parts of their salaries once they lose their portfolio or their seat, Synchron said.
The non-aligned planning group's director, Don Trapnell, urged advisers to lobby against the proposed clawback provisions, arguing the three-year responsibility period was the most unfair component.
"There is no industry in the whole of Australia that we are aware of where the income of participants is dictated by a third party up to three years after the service has been delivered," Trapnell said.
"Clients are just like voters; they can choose to replace their adviser for any number of reasons.
"I wonder how our politicians would feel being forced to give back some or all of what they earned after losing an election."
However, the announcement of a new Prime Minister this week was a fine opportunity to persuade the Government to re-evaluate the LIF proposals, he said.
Synchron drafted a template letter for their advisers to send to their local Parliament member, urging them to review the responsibility period, and urged other advisers to do the same.
AUTHOR
Malavika Santhebennur
Recommended for you
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
The firm has announced it will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels, citing a declining market and risk adviser numbers.
