Do industry funds have a vested interest in supporting LIF?
The on-going bitter debate around the Life Insurance Framework (LIF) has been injected into the Productivity Commission's (PC) review of superannuation competitiveness and efficiency with risk-focused Bombora Advice pointing to the influence of industry superannuation funds.
In a submission filed with the PC this month, Bombora Advice has pointed to Industry Superannuation Australia (ISA) having "taken an active interest in the retail life insurance advice 'reforms' debate".
"¬we ask "why is the ISA so strongly advocating for the removal of commission in retail insurance advice?" the submission said.
"We would argue that there is a vested interest in ISA supporting measures to threaten independent adviser business viability by restricting remuneration. It would appear that independent, unaligned advisers are viewed as competitors," the Bombora submission argued.
It said that a threat to small adviser business viability would mean fewer advisers, which would mean consumers would have less access to independent advice.
"This independent advice can take into account all elements of an existing portfolio, review and source solutions from across the spectrum of products available, and offer alternatives," the submission said.
"The 'Clients' Best Interest' duty of independent advisers obliges them to do so. Less advisers means less chance of scrutiny of the obvious shortcomings in the offer under super. We argue this is a commerci
al threat to the ISA and that the motivation of the ISA is commercial and not an altruistic concern for members," the submission said.
"It would make sense for the ISA to attempt to cut out or at least reduce this competition."
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