The three-year responsibility period under the clawback provisions of the Life Insurance Framework (LIF) would be like asking politicians to pay back parts of their salaries once they lose their portfolio or their seat, Synchron said.
The non-aligned planning group’s director, Don Trapnell, urged advisers to lobby against the proposed clawback provisions, arguing the three-year responsibility period was the most unfair component.
“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,” Trapnell said.
“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.”
However, the announcement of a new Prime Minister this week was a fine opportunity to persuade the Government to re-evaluate the LIF proposals, he said.
Synchron drafted a template letter for their advisers to send to their local Parliament member, urging them to review the responsibility period, and urged other advisers to do the same.
