Life insurers play limited risk advice card
Australians shouldn’t have to pay $3,500 on average for financial advice, especially when life insurers stand ready to provide limited advice about their products, according to Council of Australian Life Insurers (CALI) chief executive, Christine Cupitt.
At the same time as the Government moves further towards delivering on the first tranche of the legislation flowing from the Quality of Advice Review, Cupitt said research commissioned by her organisation has confirmed financial advice on life insurance remains too inaccessible and expensive.
This shows a serious gap in the quality of advice Australians are getting about their life insurance,” said CALI CEO Christine Cupitt.
Speaking to Financial Newswire, Cupitt said the life insurers had actively canvassed the delivery of limited life insurance advice during discussions with the Govenrment around the Quality of Advice Review (QAR).
And, as part of those discussions, she said the life insurers had acknowledged the need for those delivering the limited advice to meet minimum education standards, be subject to quality assurance and appropriate supervision.
Cupitt said that the limited advice approach would not cut across the role of life/risk advisers who remained vital to the equation.
However, the CALI move comes against the background of two life insurers – TAL and Clearview having exited ownership of financial planning businesses over the past three years with ClearView Wealth being sold to Centrepoint Alliance while TAL sold its Affinia business to Count Limited.
“It’s critical that Australians have better access to affordable professional advice when they need it most, so they can make informed decisions about how to protect their future,” Cupitt said.
“Australians shouldn’t have to pay $3,500 on average for financial advice, especially when life insurers stand ready to provide limited advice about their products which can give people added peace of mind.”
She said CALI has been advocating for life insurers to be able to provide direct limited advice to people who ask for it.
“There is a clear unmet financial advice need in Australia and a growing underinsurance problem that is leaving people unprotected when times get tough,” she said.
“Almost one in two Australians say the main driver for obtaining life insurance is for the financial protection and sense of security it provides loved ones, and we must ensure they’re getting the right advice to make that a reality.”
The Federal Government is preparing to announce the next stage of its Delivering Better Financial Outcomes package before the end of the year. CALI is calling for an expansion of the type of advice life insurers are allowed to provide their customers to help deliver the protection and certainty people need on their best and worst days.
“Of course, this should only happen with appropriate limitations and strong consumer protections to ensure better outcomes for Australian workers and their families.
“Life insurers take their legal obligations very seriously to act in good faith and prioritise the interests of the people they serve.”
“Australians shouldn’t have to pay $3,500 on average for financial advice, especially when life insurers stand ready to”… provide unqualified, unlicensed, conflicted, “advice”, to buy the insurers product.
Professional advice costs are too high, and there aren’t enough professional advisers. This is a problem caused by bad regulation. The solution is to fix the bad regulation. The solution is not to provide carve outs for super and insurance companies to deliver conflicted sales spiel masquerading as “advice”.
Does anyone get the impression that fixing bad regulation has been deliberately avoided, to justify an advice “solution” based on product company carve outs?
No the bad regulation, including LIF was sponsored and promoted by union funds and life insurance companies to achieve this outcome.
And they are winning the war no matter how reprehensible their motivations are.
The hypocrisy of statements like this when they have actively hurt Australians by denying them advice and then claim they are acting in their best interests and need to grow vertically integration to solve the problem.
I’m not normally a big conspiracy theorist but it’s hard to draw any other conclusion than this one.
Here we go again, now the Life Co’s are aiming for mass advertised Dodgy Direct Life Insurance again.
Queue RC 2.0.
“affordable professional advice” is NOT Dodgy Direct Life Ins Co sales by uneducated, unqualified, vertically owned back packer call centre jockeys.
Wash, RC rinse and Repeat.
Really is this the solution ???? FFS No.
Getting rid of Statement of Advice for life agents would be a good start. It was amazing how much insurance written before SOAs existed.
It’s very obvious that CALI are all about self-interest and not the consumers best interest
The companies in CALI were responsible for LIF. This was always their plan with it having to be put on hold when the Hayne Royal Commission moved away from the banks to focusing on financial planning and life insurance companies. Realistically something similar to what they are proposing will happen but lets not pretend that someone working for an insurer is doing anything other than flogging their own products.
A much better approach would be to make it easier to give advice to consumers, which was the part of LIF that got forgotten about once the commissions decreased.