The Association of Financial Advisers (AFA) has committed to re-engaging with the Financial Services Council (FSC) around resolving churn issues but insists the major insurers must play their role and provide appropriate data.
AFA chief executive Brad Fox said his organisation had continued to engage with the FSC on the churn issue — even after a decision had been made to step back from the original framework proposal — and would be re-engaging in the wake of the FSC receiving a letter from the Minister for Financial Services, Bill Shorten, and a strong message from the Australian Securities and Investments Commission (ASIC).
However, he said the issue was much more complex than the activities of a small percentage of advisers. He said the major insurers would need to step up to look at the impact of their own activities and to provide the appropriate data which could help determine whether it was "a question of churn or sustainability".
Fox's comments follow on from confirmation by FSC chief executive John Brogden that his organisation had received a letter from Financial Services minister, Bill Shorten, reinforcing the need for a self-regulatory approach.
Brogden said he had also received a strong signal from ASIC that the regulator would be seeking data from the industry and would be undertaking surveillance and looking for examples of churning.
He said that it was on that basis the FSC would be looking to return to the issue of self-regulation around churn and that it would be highly irresponsible not to do so.
The FSC's life insurance committee will be meeting tomorrow to discuss the issue.
