The Assistant Treasurer, Josh Frydenberg, has called on the life insurance industry to assist financial planners and advisers adjust to reforms of the retail life insurance industry arising from the Trowbridge report.
And he has said the government expects cost savings arising from the reforms to be passed on to consumers, and is working on ways to ensure this happens.
Speaking on the Gold Coast on Friday at the national conference of the Financial Services Council, Frydenberg said the Trowbridge reforms are significant, and required all parties to the process to accept compromise.
“As with all compromises, neither side got everything they wanted, but by coming to the table, each side was able to obtain a better outcome for their members than they would have in isolation,” Frydenberg said.
“I am very conscious of the challenges posed by industry reform of this scale, particularly as a result of the many discussions I’ve had with advisers since being appointed Assistant Treasurer. If there is a message I can provide the life insurers in this room, it is that advisers are looking to you to help them transition and navigate these significant reforms.
“Making sure all parts of the industry thrive as a result of these reforms should be seen as a shared goal and given the level of underinsurance in Australia; Australians need the industry to come together to improve the quality of advice and to ensure it remains accessible to those that need it most.”
Ongoing cooperation
Frydenberg said implementing the Trowbridge proposals will “require ongoing cooperation”.
“Industry, along with the Government, continues to flesh-out the detail of this package and while there is considerable detail to be finalised, the Government will not lose sight of the end objective: better outcomes for consumers,” he said.
“This objective includes an expectation that where substantial savings are generated from the reforms, these would be passed on to the consumer. We are currently exploring additional mechanisms to support this principle.”
Frydenberg said the government is “close to finalising our approach” to proposals from the Parliamentary Joint Committee (PJC) inquiry into lifting professional, ethical and education standards of financial planners.
“I will have more to say about this following the Government’s response to the FSI,” he said.
Frydenberg said that following minor and technical refinements to the Future of Financial Advice (FOFA), the new laws “should now be considered settled and given time to work”.
