Adviser group rebukes FSC level commission stance
A group of life insurance advisers representing small businesses has lashed out against the Financial Services Council's (FSC's) stance on level commissions in the life insurance framework (LIF), arguing the FSC and the big banks have undue influence on the LIF debate.
In response to a recent Money Management story, which outlined FSC's support to move to level commissions and fee-for-service arrangements if the LIF did not meet its objectives, the Life Insurance Customer Group (LICG) has argued it would be consumers who would be worse off under the FSC's proposals.
"The LICG is urging the FSC to adopt a position that will place the interests of the consumer above self-interest," the group said.
"The LICG has repeatedly called on the FSC for evidence to back up claims that consumers will benefit from the proposals. To date the FSC has not responded with a reasoned reply."
The group, which has more than 2,300 signatories to its online petition against LIF in its current form, also urged all stakeholders to abandon self-interest and aim to close the underinsurance gap, and called on the FSC to prioritise consumers.
The group also said there was substantial concern that the FSC and the big banks were employing undue influence on Government and key stakeholders in the LIF debate.
"The FSC proposals will result in alarming competitive advantage being gifted to the big banks and FSC members," the group said.
"The LIF is a complex issue that has implications for many stakeholders, foremost the consumer."
AUTHOR
Malavika Santhebennur
Recommended for you
The Federal Court has dismissed a conflicted remuneration case brought by ASIC against the director of life insurance distributor Freedom Group, where Bali holidays and Vespa purchases were among sales incentives.
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
