The Minister for Revenue, Kelly O’Dwyer (the Minister) has confirmed that the start date for the phasing down of risk commissions will not begin until 1 January, 2018 and that all channels of advice will come under the Life Insurance Framework (LIF) from that date.
The Association of Financial Advisers (AFA) has consistently lobbied for a universal start date to include all channels of life insurance. This means employed channels, independent advisers, general advice models and nil-advice life insurance models will have a level playing field.
AFA CEO Brad Fox said achieving a start date of 2018 will allow self-employed advisers longer to prepare their businesses for the significant reduction in initial commissions, while forcing employees of direct life insurance models to come under the regime of commission caps and extended clawback from the same start date as other financial advisers.
“It has taken consistent, clear advocacy by the AFA on behalf of self-employed financial advisers to ensure that direct sellers of life insurance measure up to the standards expected of professional members of the AFA under the life insurance reforms,” he said.
Since releasing the reforms in November 2015, the Minister has stated consistently that it will apply equally to all channels of life insurance distribution and despite strong pressure from some sectors of the market, the commitment to advisers will be delivered.
The AFA is continuing to lobby for a delay to the future ASIC report on the success of the life insurance reforms to allow for evidence to be collected after the reforms come into effect.
The Minister will attend part of the AFA National Adviser Conference in Canberra later this week.
