High cost of life/risk advice is the Govt’s problem

Mike Taylor

Managing Editor and Publisher

8 March 2023

The high cost of life/risk advice resulting from the Life Insurance Framework (LIF) has made it the problem of the Government, not financial advisers, according to Bombora Advice chief executive, Wayne Handley.

Addressing Financial Newswire’s Life Insurance Outlook conference in Sydney, Handley said that life/risk advice has been priced beyond the means of many Australians and had turned from something that was affordable to mostly higher income earners.

He said it had moved from “blue collar affordable” to mostly “white collar affordable”.

However, Handley said this was not the fault of life/risk advisers who had simply moved with the market.

“This is no longer a problem for advisers, it is a problem for the Government,” he said in reference to the unaffordability of advice.

Both Handley and Fitzpatricks Insurance Advisers specialist, Sam Bendeich agreed that at least a part of the answer in addressing the affordability and availability of life/risk advice would be for the Government to make financial advice tax-deductible.

In the meantime, both Bendeich and Handley agreed that life/risk advice specialists were prospering, largely as a result of referrals from other advice businesses.

Handley said that specialist advisers had rarely been busier, with Bendeich citing a formula based on a mix of fee for service and commissions.