Bombora Advice executive chair Wayne Handley has called on the government to urgently provide a timeline for the implementation of changes to financial advice laws.
“We would like the government to fast track the changes they have already gazetted and be specific with the timelines so we can be prepared as a sector to make the changes,” Handley tells Professional Planner.
“The changes [to financial advice laws] which have been gazetted are generally welcomed.”
Handley says Quality Advice Review lead, Allens partner Michelle Levy, did an “outstanding” job in her research of the industry for the final report of the review.
But he added changes to the law have “taken an age”.
“Some urgency around putting this in place will help more Australians get affordable advice,” Handley says.
Handley, who founded Bombora in 2013 to focus specifically on life insurance risk advice, was speaking to Professional Planner on his move to the role of executive chair at the firm following the retirement of chair, Kevin Martin, who has been in the role for the past nine years.
The firm appointed Niall McConville, a former long-time TAL executive, Pro Bono Financial Advice Network (PFAN) board member, and a director of Bombora, to take over as chief executive from 1 July.
Financial planners served by Bombora service some 30,000 clients around Australia. Their clients were paid some $55 million in claims over a recent 12-month period.
Handley says the lack of certainty about when the current tranche of changes to financial advice laws, which include streamlining lengthy statements of advice and giving super funds more scope to provide advice to their members was deterring firms in the industry from making new investments.
“It’s hard because you don’t know what is going to happen and when it is going to happen,” he says.
But he says it is also important for players in the sector to “get on with it” in running their businesses and working to improve the sector as a whole, including finding ways to retain and attract more advisers and helping them operate more efficiently, without waiting for government changes.
Declining numbers and shallow pools
The two Bombora executives cite the continued fall in the number of financial advisers in Australia as one of the biggest challenges facing the industry, making it harder for ordinary Australians to get advice.
They say it has also been a factor in the declining number of Australians taking out life insurance with advisers playing a key role in taking clients through the complexities of the life insurance buying process.
They say having fewer Australians in the life insurance “pool” has also helped to increase the cost of premiums life insurance and other products such as total and permanent disability (TPD) and income protection for clients.
Handley says further changes such as the stricter educational qualifications for advisers would continue to see more people leave the industry.
He says Bombora also welcomed the idea of super funds providing more financial advice for their members.
“We can see the sense of super funds having the capability to have ground level discussions with their clients,” he says.
“We just want to make sure there is a level playing field in the advice process and the charging process.”
McConville says the use of technology, including artificial intelligence, will help financial planners be more efficient and one of the key ways to counter declining numbers.
He says Bombora is planning to take stakes in some advisory firms to help them finance investments to upgrade their technical capabilities.
“If we look to the future, it is hard to see where we are going to see a lot of risk advisers coming from,” he says.
“We need to find ways to use technology to allow the advisers to be laser focused that the time they have, they are spending in front of customers.”
He says Bombora had historically provided licensee services to advisers who specialised in life insurance related risk writing.
“It’s done a great job there and helped those practices grow over time,” McConville says.
“But the business is evolving and now we are looking at a different sort of service proposition for our advisers – we are looking at helping them with claims, retention, and outsourcing operations so they can be more efficient.”
McConville says advisers need to spend more time with customers and shouldn’t be spending any time on back office operations.
“There is a lot of opportunity out there for advice businesses which are looking for capital, and there’s opportunities for a business like Bombora to take a stake in businesses to help them grow,” he says.
Giving back
Handley described McConville, who has been a board member of Bombora since April 2024, as a “seasoned financial services executive with a proven track record that has spanned two decades in advice, insurance, distribution and strategy”.
McConville is a long-time board member of PFAN as charity which was conceived at a Professional Planner licensee summit event.
McConville says the network provides free financial advice for sufferers of multiple sclerosis and motor neurone disease who cannot afford advice.
“We have around 100 advisers around the country who give their advice for free to help people with MS and MND work out financially how they are going to keep going,” he says.
He says the process also included advising sufferers on issues such as keeping their insurance going and accessing government services including Centrelink.
“It’s part of the industry giving back which it has always done in many ways, I love being part of it,” McConville says.
“We are growing our numbers, and we are starting to build up a bit of a presence.”
Handley says the drop off in the number of financial advisers in Australia, including the large-scale exit from advice by the banks, meant that many Australians were not buying life insurance and its related products such as income protection and TPD.
“Australians are taking on more and more debt and have less protection to cover that debt if something bad happens,” Handley says.
“It’s a real worry for a society like ours. It has been proven time and time that people who seek advice are better off than those who don’t.”
There are also fewer people going into the life insurance pools, Handley says, which is adding to the price pressure which companies, clients and advisers are facing.
“Income protection and TPD have seen significant rate increases over the past 10 years,” Handley says.
He said there needed to be more innovation in life insurance contracts, and more work is needed to be done in providing products which took into account the increasing incidence of mental health claims.
“It’s a real problem in society and many of the products were not really designed to cater for it,” he says.
