LIF reforms agreed to under duress
The Life Insurance Framework (LIF) process has been likened to a union negotiation, wherein advisers and associations were threatened to accept the remuneration under duress "or it will be even worse for you", with the imposition of 20/20 level remuneration.
That was the argument from risk adviser group, the Life Insurance Consumer Group (LICG), which has continued its assault on the Financial Services Council (FSC), while blaming insurers for being allowed to chase commercial imperatives without being subject to checks and balances.
"LICG members believe that these ‘reforms' are completely political, and in the game of politics we have all, our adviser community, our adviser associations, and consumer groups, been outwitted and outplayed, out-resourced and out-funded, by the FSC," the group said in a statement.
Furthermore, the group argued that any reforms should include an evidence-based review of the entire industry across all distribution channels, including industry superannuation funds, and vertically-aligned distribution models to track the interconnection of all components of the industry.
The LICG repeated its argument that there was no evidence or data for reform proposals, nor was any "consumer benefit" outlined.
It also said there was no way for adviser outcome to influence insurer behaviour, hence "no possibility for advisers to defend themselves".
With the FSC and the Government stating that it would move to level remunerations in 2018 if consumer outcomes did not improve, the LICG argued this lacked base-line data, and was not measured against anything.
"Advisers have nothing with which to defend themselves and no time to do anything anyway. FSC are permitted to create the proposition and proposal so far, so there will be no prizes for guessing what the ‘review' will find," the group said.
"Is this good policy for the future of our life insurance industry or a political manipulation to get advisers ‘out of the way'?"
AUTHOR
Malavika Santhebennur
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