Risk-management licensee Synchron has welcomed the Financial Services Council (FSC)’s decision to abandon an application to the Australian Competition and Consumer Commission (ACCC) to have its policy to address “churning” approved.
Synchron director Don Trapnell said the move by the FSC to seek class-order relief from provisions in the Trade Practices Act in order to implement its anti-churning policy would have been anti-competitive.
“Synchron had already consulted legal counsel in order to rigorously challenge any such application,” he said.
In an industry that is driven by statistics and common sense, Trapnell said the FSC’s policy simply did not stack up.
“The FSC in particular and the life insurance industry in general simply could not provide the statistical evidence that supported that a systemic culture of churning exists amongst advisers,” he said.
Trapnell added that if life insurance companies truly believe that longer responsibility periods will result in savings to the end consumer, they should build products that recognise these savings and bring them to market.
“We would be delighted to support them,” he said.
Trapnell also said Synchron has always been willing to support a new model for adviser remuneration if it were driven by competitive forces.
“It was competitive forces that introduced a one-year adviser responsibility period in the past and it should be competitive forces that reshape responsibility periods in the future,” he said.
“It has taken some time, but at last commonsense has prevailed.”
