In welcoming Australia’s new Prime Minister Malcolm Turnbull, Sentry Chairman and Managing Director Murray Hills says he can expect to receive many direct approaches from advisers, dealer groups and industry stakeholders requesting that he heeds their requests to review the proposed changes of the Review of Retail Life Insurance Advice report and recommendations that was released by ASIC on June 25.
Hills also confirmed that he would support this action by Sentry advisers and cited Roger Smith, Principal of leading risk advice practice Cost Benefit Analysis Pty Ltd as the first of the dealer group’s advisers that would be writing direct to the PM to voice their concerns.
“I have been in financial services all my working life and together with my wife Regina have provided risk protection cover for countless businesses, individuals and families – not to mention the millions of dollars paid in insurance claims that ensured Australian consumers financial well being was protected and they and their dependents did not have to rely on social welfare payments”, said Smith.
Although he supports the need for reform, like so many in the industry, Smith points to the ‘3 year responsibility period’ as totally unworkable, not commercially viable and was not a recommendation from John Trowbridge who saw no reason for a change away from a one year responsibility period.
“The proposed changes have quite literally rocked the foundations of the advice industry which is comprised of thousands of small business owners to such an extent that the sector is now fragmented and in my view in danger of imploding”, continued Smith.
“The ‘3 year responsibility period’ represents a threat to the commercial viability of adviser SMEs that provide an invaluable service to the community”.
“Furthermore, the proposed reform flies in the face of the ‘client’s best interest’ as a 200% increase in the responsibility period severely limits the capacity of advisers to make changes necessary for the client as a result of the financial impost that will be forced on the adviser”.
Adding his voice, Hills said that no business in any profession can survive let alone prosper with a three year contingent liability over the operation as advice practices will be required to do.
“I have said on many occasions that most consumers understand and are aware how complex the financial world has become and for the need to seek the guidance of qualified financial specialists to provide them with value-for-money personal advice and peace of mind with strategies that safeguard their personal, retirement and wealth creation aspirations”.
“The survival and growth of the personalised non-aligned financial advice sector and the concerns voiced by professional practitioners must be a priority for the new Prime Minister and federal government”, concluded Hills.
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