Australian Financial Risk Management (AFRM) has hit back at assertions by plaintiff law firm, Maurice Blackburn that risk advisers need to justify their value, arguing that the law firm’s Josh Mennen had himself not backed up his claims and accusations.
AFRM’s Rob Vitnell suggested that Mennen had been selective in his interpretation of Australian Prudential Regulation Authority (APRA) claims handling data and had overlooked the value the value that life/risk advisers delivered at claims time.
“We are astounded at the lack of evidence used by Mr Mennen to justify his statements,” Vitnell said.
“A quick search of APRA’s website allows a review of life insurance claims outcomes of Individual Advised versus Group going back to the first half of 2017. With the exception of the TPD figures in this latest APRA report, the available data shows consistently that there is only a one to two point variance between Individual Advised and Group claims outcomes by cover type across all reported insurance cover categories,” he said.
“Therefore, we find the claim that ‘This report has some very compelling data that makes clear that group insurance through super remains a crucial product that delivers significantly greater value for consumers than other policies, including those supposedly tailored by financial advisers’ utterly baseless.”
Vitnell said that there also appeared to be “a determined ignorance of the findings of ASIC Report 633 - Holes in the safety net: A review of TPD insurance claims - which was critical of the handling of TPD claims specifically within in the Group insurance sector”.
“ASIC Report 633 also highlighted, in paragraphs 167 and 168, that more than 50% of withdrawn claims were withdrawn within 60 days of claims being notified, suggesting that consumers may be withdrawing their claims during the lodgement process. ASIC found that; ‘the engagement of the superannuation trustee (for group claims)’ was one of ‘two specific areas in the lodgement process that can create significant hurdles for consumers’,” he said.
“In contrast, at AFRM, we are proud of the fact that we have made a positive difference in the lives of our clients by providing them with the best possible financial risk mitigation advice and always doing all we can to protect their best interests at claim time.”
“The evidence we posit for this statement is that, in the 23 years we have been in business, we have achieved a total of more than AUD$180m in claims paid to our clients. This represents 663 total claims managed for 485 individual clients. And having the large and mature client base that we do, this positive claims outcome figure is constantly increasing.”
“Put simply, good advice leads to good claims outcomes,” Vitnell said.