Show us the regulatory proof of Report 413

Three years on from the Australian Securities and Investments Commission (ASIC) report regarded as the catalyst for the Life Insurance Framework (LIF) key elements of the life/risk advice sector are questioning whether the action was justified and whether it has been underscored by regulatory action.

Money Management has received an analysis from a section of the life/risk adviser segment which questions ASIC’s assertion to a Parliamentary Committee that more than half of the advice provided by independently owned licensees was non-compliant.

“What action has been taken against these licensees responsible for advice where more than half of it was non-compliant,” the analysis asked.

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The analysis also pointed to ASIC’s original Report 413 which it said had pointed to seven licensees including two large licensees and three medium-sized licensees and asks why no action has been taken against more than one over the past three years.

“What other regulatory action has been taken against those caught out by ASIC Report 413?” it asked. “Surely some action must have been taken against the non-institutionally owned licensees that generated an above 50 per cent fail rate.”

“Never before has a report caused so much demand for change and fundamental reform, yet appears to have delivered such little regulatory action,” the analysis said.

It claimed that it was time for the Government and ASIC to explain what was going on in circumstances where three years had passed with little regulatory action underlining the need for the LIF.

Money Management’s Life/Risk Breakfast will be debating the current regulatory framework around life/risk on Thursday 19 October.


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Ready, shoot, aim!

You don't need a debate around the regulatory LIF framework.
This was all about the greed of life companies utilising an inept regulator together with an incompetent left wing Liberal government to destroy the more than 100 year old distribution network on a false premise.
No one despite those actually working in the industry who knew differently were prepared to listen.
Not one Life company was prepared to name and shame the handful of "churners" and turn them over for possible prosecution.
Not one life company was prepared to be the first to reduce their commissions based on profitability.
Not one life company was prepared to be the first increase their premiums based upon sustainability.
Not before, that is, a gullible, inept, incompetent left wing Liberal government sought to introduce draconian laws similar to taking a sledgehammer to the industry,.... which in essence was like crushing a walnut.
The Life insurance adviser will disappear, with no thanks to those who forgot to remember all they were representing.

More misleading information from ASIC. Report 413 was targeted at advisers suspected of churning. It was not a random sample so it should never have been used to make gross generalisations and defame the entire financial planning profession. Let alone used it as a basis for draconian laws.
Now they are taking an even smaller subset to shame independently owned licensees! What a shocking regulator we have. No integrity at all.

Time for all these lies and deliberate bureaucratic double-talk to be brought out into the harsh light and shown for what they are. In other countries, government officials who lie or are shown to be part of some deliberate corruption are either jailed, or worse.

Time for ASIC to have new heads appointed, or else dismantled and a new sensible governing body created.

Pity Malcolm has't got the goolahs to do it, or else doesn't want to upset his FSC donors by doing anything to harm LIF.

In relation to the analysis within ASIC Report 413 of the advice success rate relative to commission type, they found that when either the Hybrid or Level commission model was assessed, the advice success rate was 93%.
With results as successful as this and with the then Hybrid commission rate at 80/20, how has the determination that legislatively reducing the Hybrid commission rate by another 20% to 60%, will improve the advice outcome for the consumer? There is no evidence to support this.
The Financial Services Council's submission to John Trowbridge as Independent Chairman of the Life Insurance and Advice Working Group on 5th Feb, 2015, repeatedly refers to " improve consumer outcomes", " improve quality of advice" and " improve quality of Life Insurance advice" whilst at the same time advocating a total transition to Level commission only at a rate less than the then current standards.
This was not supported by the ASIC Report 413 in that there was no measurement of advice success for Level commission only or Fee for Service models in isolation.
By the FSC arguing that a Level only commission option will improve the quality of advice and consumer outcomes, it is not based on any evidence or data to support that proposal.
It is simply a theory.
Profitable advisory practices delivering high quality advice is what drives best consumer outcomes.
The Government have been manipulated and sold a theory and they are ultimately vulnerable due to a vast lack of knowledge and confusing and conflicting information over issues like policy churn.

Report 413 has actually made things worse, gee thanks ASIC

ASIC report 413 was simply about ASIC picking an easy market to get more funding. They (ASIC) only looked at 200 files from individuals they had specifically targeted to get the outcome they wanted. Now they admit that churn is not a big issue and constantly refuse to back up their claims with hard evidence 3 years on. The LIF is a terrible outcome for customers and ASIC and the FSC need to be held accountable if their actions have been at best misleading and at worst corrupt.

Me thinks someone at ASIC is about to be in a whole lot of hurt !

Looking at the upshot of this debacle contrived by the deceit at the FSC on the product manufacturing side post LIF ;

Macquarie sold to Zurich
ANZ on the market
MLC sold to Nippon Life
Comminsure sold to AIA
Asteron on the market
Clearview option for Sonly life to buy out
All transactions worth more with LIF enacted
Does not leave much owned by Australia !

Cant see this helping the Federal Government's company tax take reinsurance is a great transference of income overseas !

As hard working Australians all have every right to be ashamed !

We want justice !

Once LIF fully in play we will only provide risk advice to full planning clients.

Running a risk only business post 2020 will be an exercise in public service only, it will NOT be a profitable business.

Unless of course you automate advice i.e. make it generic, don't customise it and tell anyone with underwriting issues to sort themselves out, just like the TV marketed risk policies.

This will "improve consumer outcomes", " improve quality of advice" and "improve quality of Life Insurance advice"?????

ASIC mark: complete failure.

Maybe ASIC should go get a degree?

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