The Association of Financial Advisers (AFA) acknowledges the passing of the Life Insurance Remuneration Bill (the Bill) through the House of Representatives yesterday with bipartisan support, and that it is expected to progress through the Senate.
AFA CEO Brad Fox said, “We are looking forward to advisers having greater certainty and are keen to see elements of the Life Insurance reform package progressing.”
This includes improvements to the Financial Services Council (FSC)’s Life Insurance Code of Practice, Statements of Advice, widening of approved product lists, and scrutiny and improvements to life insurance claims handling and underwriting practices, as covered in AFA’s recent submission to the Parliamentary Joint Committee on Corporations and Financial Services reviewing the Life Insurance industry.
Remuneration is just one part of the Life Insurance reform package, but it is one Mr Fox said must not be underestimated, as changes to remuneration challenge business models and, in many cases, an adviser’s sense of identity.
“While most advisers understand that phased reductions in upfront remuneration from 2018 will be offset by higher ongoing remuneration, the change is still significant for many advisers,” Mr Fox said.
The AFA has a progressive focus on adaptive change and peer support through its communities of practice, helping to position today’s advisers as tomorrow’s professionals.
“Advisers need to work together as professional peers to learn from each other’s experiences about how to embrace different remuneration models such as hybrid and level commissions and fees,” Mr Fox said. “For most advisers, transitioning successfully will bring increased practice valuations.”
