Putting life back into advice

Jim Minto

The Federal Government needs to make changes to the Financial Services Reform Act because it is preventing many people getting appropriate life insurance advice, according to the chief executive of Tower Australia Group, Jim Minto.

Minto pointed to the latest life insurance figures released by Plan For Life this week and said that while there had been significant growth there remained significant room for improvement.

“As encouraging as the overall growth is, the issue remains that many people are unable to get the life insurance protection they need because life insurance is often not well understood and most consumers need some advice,” he said.

Minto said the availability of advice to consumers was limited by existing regulation.

“Many people who seek to buy moderate amounts of life insurance want to ask just a few questions related to their own circumstances but are effectively prevented from getting the answers they desperately need because of the restrictions imposed by FSR [Financial Services Reform],” he said.

“The industry and the Government need to look at a more accessible alternative to the full-advice model, which effectively prevents people getting life insurance advice unless their annual premium is over $1,000,” Minto said.

He said a proposal was before the Government to enable simpler advice such as existed already within the superannuation arena.

“The Government response to some advice concessions around superannuation was excellent but life insurance needs this as well,” Minto said.

“We fully support that proposal and adoption of it would help to ensure ‘middle Australia’ gained greater access to advice around the life insurance protection they need,” he said.