Patron opposes FSC's 'churn' proposals
Patron Financial Advice has opposed a Financial Services Council proposal to introduce a binding standard for insurance business, saying it would restrict consumer choice, unfairly penalise financial planners, and push them to the brink of survival.
Removing upfront commissions, extending responsibility periods, and removing or replacing policy terms, coupled with [Future of Financial Advice] compliance frameworks reforms, would be an onerous and costly cross to bear for all financial advisers, Patron general manager Robert McCann said in a statement.
"The life insurance industry is perfectly capable of weeding out any bad apples on its own merit," the statement read.
"Many consumers actually choose to replace their current risk policy with an improved product from the same provider, which should not be regarded as churn. Is consumer choice necessarily a bad thing?"
A sustainable industry can be achieved through further collaboration between life insurance companies and financial advisers rather than excessive third party micro management, McCann stated.
"To red flag the issue of retention, label it as 'churn' and then blame it on financial advisers is irresponsible and ill informed," McCann stated.
McCann could not be reached for comment due to annual leave. The FSC did not wish to comment.
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