Risk advisers hit back at Maurice Blackburn

24 April 2020

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. 

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“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“ASIC Report 633 also highlighted, in paragraphs 167 and 168, that more than 50% of withdrawn claims were withdrawn within 60 days of claims being notified, suggesting that consumers may be withdrawing their claims during the lodgement process.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. 

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It's the industry super funds, where the members are being charged for advice they are not receiving, who are having most of the problems with insurance claims. Fund members with long standing life agent/financial advisers they can work with, have far less problems.

Well done Mr Vitnell.

Let me declare COI first - I am a (proud) past Director of AFRM. I can assure you that they do make a positive difference to the lives of people.
Josh Mennen may like to look at the at the relative value offered by lawyers such as himself and advisers such as Rob a Vitnell fighting for clients rights at the time of a claim based on any charges by the adviser or lawyer. It will not be a pretty picture for Mennen. Advisers charge from zero for an existing client up to $10,000 for a complex extended dispute - and we can be talking years - for a claimant who did not obtain their policy through them and no previous fees have been paid.
Mennen’ s comments on the stats for group vs non group policy claims on income protection show he either does not understand the difference in the policies or the nature of those insured and the risk, or that he is deliberately choosing to use data that in an inappropriate way.

Try contacting your industry fund at the moment for some information...Good Luck!!!

Congratulations Rob Vitnell on a well thought out, researched and executed article.
Over 30 years of practice in this space, we too have assisted many clients to achieve a positive outcome for themselves, their family or their businesses...many of whom have not been initial clients at all, but who were referred to us because we know our business and we treat clients with respect and dignity and will fight the good fight if it becomes necessary based on morals, ethics and simply what is right and fair.
Dedicated, risk insurance professionals who really know their business are of significant worth to their clients and the community as they can assist to remove the anxiety and apprehension that clients experience when trying to work through a potential insurance claim at a time when their mental or physical capacity may be significantly compromised.
It is high time, we are stopped being repeatedly kicked by individuals like Mennen, law firms like Maurice Blackburn and the conflicted consumer groups like Choice.
The ridiculous thing is that whilst these groups constantly criticise our advice, services and remuneration models, our very own clients very rarely make any complaints in relation to any of these matters.
Very well stated Rob and congratulations again.

You could not get less help and compassion than from an Industry Fund. I was told by a REST officer in July 2018 that their Insurance Company had agreed to pay a non dependent beneficiary, in November I was told it is whoever is living there at the time of death, on friday 21st December I was told I was rejected and had 21 days to prove my case, a week later a solicitor told me I didn't have to prove anything the person contesting had to prove her case but the t he solicitor put my case at a cost of $36k, and 3 months later i was told by REST a girl would receive my son's Super and Death Benefit $210k. No marriage, no engagement, no registeting of a relationship, no children biological or step, no shared mo rtgage, lease, bills, banks accounts, no money going between bank accounts. Now in March 2020 (23 months after my son's death) I have been told the Trustee of REST stands by his decision and thinks it is "fair". Fair is a concept, fair is perception, fair is subjective. Are Australian workers putting 9.5% of their income into a ponzi scheme, to be told by a person he has never met, that this is what is going to happen because he thinks that is "fair". I would go for someone who actually cared about the Fund member and his wishes and that doesn't happen with Industry Funds and their group insurance. Maybe we get what we pay for. BUT also remember we didn't choose Superannuation it was forced o us, as was the fund we went into. Maybe this is where Maurice Blackburn comes in ... is any of this legal???

Janis, you really should take this to AFCA. The decision here needs to be reviewed. Make a complaint about how REST have handled this, and the outcome, and proceed from there.

I dare say Tracey Grimshaw would be interested as well, this is what those funds are really scared of, bad publicity in the mainstream media, may work in your favour. Go for it Janis, good luck.

Maybe a large group of risk insurance advisers could sue Maurice Blackburn for reputational damage ?

You’re never going to get an unbiased view from a lawyer!
Advisors do a lot of their work for people for a fraction of the cost!
Just look how that moron who headed the RC treated them, a true disgrace!

Maybe AFRM et al should make a complaint. “What is unsatisfactory professional misconduct?”

“the second most serious allegation a solicitor can face ... includes conduct of a lawyer occurring in connection with the practice of law that falls short of the standard of competence and DILIGENCE that a member of the public is entitled to expect of a reasonably competent lawyer” (section 296 of Legal Profession Uniform Law (NSW)) .“

Tell me Mr Mennen of Maurice Blackburn, do you refund your fees to clients who you represent and lose contested court cases?

Maurice Blackburn..the worst of the ambulance chasers...

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