Synchron is calling on the advice community to lobby for change to the clawback provisions of the Life Insurance Framework (LIF).
Director Don Trapnell said that while a fresh appraisal may be possible under a new Minister, until the Cabinet reshuffle has been announced and the Minister has had the opportunity to evaluate the LIF, the proposed three-year responsibility period (the clawback provisions) remains the most inequitable element and advisers should be lobbying to have it changed.
“There is no industry in the whole of Australia that we are aware of where the income of participants is dictated by a third party up to three years after the service has been delivered,” Mr Trapnell said. “However, the clawback provisions are not yet set in stone and with the Cabinet reshuffle, this is an opportune time to do something about it,” he said.
Mr Trapnell says the three-year responsibility period is akin to asking politicians to pay back some of their parliamentary salaries when they lose their portfolios or fail to be re-elected.
“Clients are just like voters, they can choose to replace their adviser for any number of reasons. I wonder how our politicians would feel being forced to give back some or all of what they earned after losing an election.”
To better help policymakers understand the impact the three-year responsibility period would have on advisers, their businesses and their clients, Synchron has drafted a template for a letter for their advisers to send to their local Members of Parliament, requesting the responsibility period to be reconsidered.
“We urge all advisers to follow Synchron’s lead and petition the government while they still can,” said Mr Trapnell.
