Life/risk debate remuneration focused
The recent debate on the life insurance reforms have centred on remuneration rather than the quality of life insurance advice provided to consumers, the Financial Planning Association (FPA) said.
Chief executive, Mark Rantall, made the comments as the association launched a life insurance advice guide to help advisers apply the FPA Code of Professional Practice to life-risk advice.
"We have produced this guide to help members identify and address common omissions and errors in the provision of advice relating to life insurance," Rantall said.
"A better advice process, well-structured advice, improved client servicing, and a well-defined value proposition will help build public trust and confidence in life insurance advice, and ultimately the profession as a whole."
The FPA released a 10-point Life Insurance Blueprint in May, which, among other things, called for commissions to remain and to be higher initially to reflect the costs of providing initial advice, said advisers should be partly responsible for retaining the policy and that commissions should be reversed for up to the first two years of a new policy, called for a ban on other forms of conflicted remuneration, and proposed a transition period of no more than three years to the new model.
Responding to the blueprint, the Association of Financial Advisers' chief executive, Brad Fox, said the two associations seemed to be united on the direction in which advisers should be headed in the life/risk space.
The guide, which was compiled with input from FPA members, has ten principles and is divided into eight sections, and includes parts of the corporate regulator's Life Insurance Advice Checklist.
The guide applies to both comprehensive and limited (staged or scaled) advice.
A clear value proposition for life insurance advice was rarely limited to a one-off transaction, and the guide would help advisers support clients over the long-term ad their circumstances changed, Rantall said.
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