Political outlook grim on post-LIF remuneration
The major financial planning groups will have to work hard to retain life/risk premiums beyond the 2021 review of the Life Insurance Framework (LIF) if the attitude of both Coalition and Labor politicians attending the Financial Services Council’s (FSC’s) Life Insurance Conference is a guide.
While the Liberal Party’s Jason Falinksi told a conference panel that a Coalition Government would await the outcome of the LIF review before making a decision, the Opposition shadow assistant Treasurer, Matthew Thistlethwaite signalled a Labor Government was more likely to support the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
In the Royal Commission’s final recommendations, the commissioner, Kenneth Hayne urged that the current cap on life/risk commissions should be reduced and ultimately set at zero.
However, reflecting the view of many of the major life/risk insurers, Integrity Life managing director and chief executive, Chris Powell stressed the importance of advice with respect to life/risk insurance.
Further, Powell agreed with the contention that insurance advice should be treated differently to investment advice.
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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.
