The Financial Services Council (FSC) has declared its support for a move to level commissions and fee for service arrangements if the Life Insurance Framework (LIF) fails to meet its objectives.
The FSC has used its statement of policy priorities to declare its position, albeit stating it’s hoped that the existing LIF approach works as planned.
The FSC document points to the need to monitor the outcome of the new LIF regime “to provide additional integrity around adviser behaviour” and pointed to the review slated to be undertaken by the Australian Securities and Investments Commission (ASIC).
“ASIC will undertake a review of the reforms which will consider whether there is significant improvement in practices,” the policy priorities document said.
“FSC supports reviewing the application of the reforms and believes a commitment to move to level commissions and fee for service remuneration arrangements is necessary if the reform is failing to achieve its objective.”
Referring to the terms of the LIF, the FSC said the arrangements allowed the continuation of upfront commissions at levels that provided support for the independent adviser market, and also provided for an appropriate transition to remuneration practices “that are better aligned with consumers’ interests’.
