LIF changes not price fixing – O’Dwyer

The changes in commission structures under the new Life Insurance Framework (LIF) is not about price fixing as commissions are still allowed for life insurance advice unlike other products covered by the Future of Financial Advice (FOFA), according to Kelly O'Dwyer.

Addressing the Association of Financial Advisers (AFA) 2016 National Adviser Conference via video on Wednesday, the federal minister for revenue and financial services said while the Government could have heeded recommendations from the Financial System Inquiry (FSI) to ban upfront commissions altogether and move to level commissions, it instead decided to work with key industry stakeholders including the AFA to reach a compromise.

O'Dwyer also said level commissions and fee-for-service would not be affected under the reforms.

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The comments came as the minister sought to clear confusion and cease the misinformation that had spread in the life/risk advice industry.

She emphasised that the LIF reforms would cover all life insurance sales involving advice regardless of whether it was personal advice or general advice.

"There is absolutely no carve out for direct sales and the government will ensure the future sale methods designed specifically to avoid the reforms will be captured including those with no advice provided to the consumer," she said.

O'Dwyer said she would introduce the legislation this month into the Parliament, which would transition advisers to the new remuneration structure on 1 January, 2018 regardless of their employment arrangements.

"This is a departure from the approach undertaken during the FOFA reforms and a variation to the original life insurance framework legislation which originally proposed a standard approach to compliance by grandfathering employee advisers for the duration of their specific enterprise agreements," O'Dwyer said.

She said she would ensure the reforms did not favour one part of the industry over the other, having listened to concerns of small and large businesses, and financial advisers.




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Comments

Comments

Yep and she still does not get it! People don't buy insurance or the right amount of insurance without professional guidance, in 30 years I have never ever had any one walk into my office and say I need insurance. Insurance is sold and because sales are down we how have an under insurance problem caused by you guessed it, Politicians! So now all tax payers will have to foot the bill, but don't worry, Politicians are safe as houses because they get all of it for free at the tax payers expense. Why are Australians so bloody apathetic??

It is price fixing, try that on with accountants and lawyers whilst you are at it. It's interesting to note the lack of respect O'Dwyer showed the advisers by not bothering to show up in person at the AFA conference, what was she scared of? Home truths?

Oh, no... Absolutely, definitely not price fixing! (sic)

Probably scared of tomatoes and other rotten vegetables thrown at her, and videos of mass booing and hissing...

I am so sick of politicians blatantly lying to our faces, "spinning" while "Dancing on the head of a pin", and expecting people to swallow their BS. What happened to the honour, integrity, personal responsibility, and accountability of public service?

A complete insult to the Senate with the wider insurance inquiry and her own party and colleagues

Why the rush to get this through even though the start date is 1//1/18

Is there something else we don't know about !

It may have something to do with the AFA Conference and EGM this week (today, in fact). Even if the proposed restrictions placed on the AFA Board are approved by Members, than "Oh, sorry, too late - it's before Parliament, we can't make further changes..."; (or),

It may have something to do with the Bank CEO's appearing in Canberra this week. Who knows what other "landmines" might appear to derail her corporate master's edicts...

All I know is that uneducated, ignorant, incompetent, and corrupt politicians, by trying to twist reality and common sense, create poor, destructive, expensive policy; which then leads to bad law, convoluted, expensive, and irrational Regulation; costs millions, and sows destruction, mistrust and contempt for "the system"; and ultimately (when taken to its natural extreme) civil disobedience [non compliance...], civil insurrection, and social breakdown.

IMO, Australia is definitely showing the first signs of air headed, witless leadership; blatant commercial "Law of the Jungle"; evolving bureaucratic totalitarianism; and eventually, internal collapse.

There is a limit to what mainstream society can accept when policy is directed [at one extreme] by Monolithic Monopolistic Monstrosities like banks; and by infantile Marxist Greenies at the other. The "Tail Wags the Dog", and in the end, the dog runs under a bus.

Maybe we should "Churn" some politicians!

Couldn't agree with you more DJ. We have been in a period of witless, air headed leadership for some time - not helped by the rise of political correctness, the loony left and political instability at national and state levels where successive oppositions just say no to nearly everything. There is another alternative however - find another country to live in where using your own brain is still encouraged. I'm actively looking for one.

Kelly still has baby brain you can tell that by how she voted against her own partys motion and she thinks she has a grip on the LIF I thin she is dreaming and then we have trowbridge making a mockery of the advisers, see link below and if it has been edited out go to my linkedin page to read it.

This Minister is clearly out of her depth, instead of swallowing what she is feed by those with a vested interest she should do her own research, but I suppose that would require thought

Then the Minister also needs to explain why it is ok for ISelect to switch from Medbank Private Health Fund to AHM and visa versa for a commission of 40%. Have a client who rang ISelect, they were with Medibank Private and she was advised to switch to AHM. Same clients different day, rang ISelect and said she was with AHM and was advised to switch the Medibank private. WTF?

I'm afraid she was groomed by MLC and then the FSC over a number of years in the seat of Higgins

Just follow the money trail :)

that's a bit cryptic Angry, what's MLC got to do with it and the seat of Higgins?

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