Council of Australian Life Insurers CEO Christine Cupitt believes speed is of the essence for advice reform, as an impending election is likely to delay the chance of seeing necessary legislation introduced.
As the industry awaits Tranche 2 of the Delivering Better Financial Outcomes legislation, the Professional Planner Advice Policy Summit will discuss why the reforms are necessary to expand access to advice, including for life insurance.
The sold out event will be held on 10-11 February at Old Parliament House in Canberra, ACT, bringing together influential members of the profession to debate the best policy agendas for the industry.
Speaking on the ‘Resuscitating a life insurance advice ecosystem’ session, Cupitt will be part of a discussion centred around how the new class of adviser can be utilised to expand access to life insurance advice and why it is critical for the government to implement the DBFO reforms before the upcoming federal election.
Cupitt calls upon the government to pick up the pace in implementing Tranche 2 of DBFO reforms because many Australians are wanting life insurance advice but do not have the access.
“Millions of Australians and their families are waiting in line for that affordable advice and delays to the legislation mean that people are going to be waiting longer and not having access to the advice they need to build their financial safety nets,” Cupitt tells Professional Planner.
“We’re calling on the government to progress that legislation as quickly as possible, so that we have certainty around what we need to do.”
Outgoing Minister for Financial Services Stephen Jones’ resignation from politics only makes this more urgent with no successor announced yet, despite Labor’s expressed commitment to legislating advice reform.
Cupitt says the next tranche of DBFO legislation is critical, especially for the implementation of the new class of adviser. She says it is essential the reform is passed as soon as possible because it will take time to actualise.
“Life insurance stands ready to implement the new class of adviser, but it can’t happen overnight,” Cupitt says.
“We won’t be able to stand up this new advice service overnight which is why it’s really important that we get the legislation introduced and passed so that we have certainty about what the requirements will be, so we can get on with building the courses.”
She explains new education courses will need to be designed and approved which takes time and, following the introduction of the courses, the incoming advisers would need to go through them “so that they’re appropriately trained”.
Cupitt also says she wants the education courses for the new class of adviser to be pathways to becoming fully trained advisers.
“[CALI] wants to make sure that the settings are right to encourage people to work for life insurance and provide that more simple advice, but also see that as pathway for people to go away and get qualified to become a more comprehensive, fully qualified adviser.”
The discussion at the Advice Policy Summit will also address the Life Insurance Framework and how it can be improved upon, but Cupitt says CALI supports the established Life Insurance Framework as it currently stands which changed commissions to 60 per cent up front and 20 per cent ongoing.
“[CALI] has been very clear that we support commissions in relation to life insurance advice, and we support the Life Insurance Framework in its current form,” Cupitt says.
“If the government is to consult on changes to the framework that we would participate in that consultation.”