MLC Life pushes accessible risk advice in QoA Review

MLC Life

10 August 2022
| By Liam Cormican |
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MLC Life Insurance believes Treasury’s Quality of Advice Review (QAR) should focus on how to ensure more access to financial advice for all Australians, regardless of their wealth.

As Independent Reviewer Michelle Levy and Treasury considered their recommendations ahead of a draft report anticipated later this month, MLC Life Insurance believed all options should be considered to make advice more affordable for those that receive it, and more cost effective for those that provide it.

Michael Downey, general manager for retail distribution partnerships, MLC Life Insurance, said successive and ongoing regulation of risk advice was leaving too many Australians vulnerable to life events through a lack of insurance.


“Extensive research shows unequivocally that people have greater peace of mind when they receive quality, life-long, financial advice. But after years of inordinate regulation, however well intentioned, we are haemorrhaging advisers who provide critical advice to clients in their time of need. The trend is not sustainable.

“Unless we take steps to reduce the cost of advice, I have a real fear that only the wealthiest Australians will be able to afford to see an adviser. That means fewer people will have appropriate life insurance protection for their needs and they will fall through the cracks. Where is the fairness in that outcome?”


According to benchmarking research by MLC Life Insurance into the cost of advice, unless advisers could remove 20%-25% of the current cost base for each business, advice would be unprofitable, leaving many Australians to make important financial decisions on their own.

On average, a total of 10 hours was required by a risk adviser to prepare and implement life insurance advice for a client in simple cases, and up to 15 hours for more complex cases.

MLC Life Insurance was seeking to ensure:

  • Consumer choice in how to pay for advice - To have a sustainable advice sector, commissions must continue to remain an option that supports everyday Australians having access to much-needed financial advice during key life moments. This includes maintaining the Life Insurance Framework.
  • Scaled advice tailored to specific customer need – For life insurance, this could be as simple as a “Life Cover Assessment” that may or may not include a product recommendation. Despite consumers calling out for this style of advice, current regulation and guidance makes this difficult in practice, with often the only options provided being costly full, holistic personal advice or no advice/support at all.
  • Tax deductibility of advice - The cost of obtaining personal financial advice should be tax deductible, to increase affordability and accessibility. It may be appropriate to target this assistance to ensure it has the effect of enabling those who cannot currently afford advice, rather than subsidising those who already pay for financial advice.
  • Increased use of technology and digital solutions - Legislation and regulatory practice should support innovation and enable technology to provide solutions to industry challenges. Digital solutions, which aim to address the complexities of the advice process, deliver cost-effective compliant advice journeys, that are adviser-led, technology driven and supported by regulator and industry stakeholders.

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