The Association of Financial Advisers (AFA) and other key stakeholders dealing with the evolution of the new Life Insurance Framework (LIF) will hold their first formal meetings with the new Assistant Treasurer, Kelly O’Dwyer, this week with the AFA seeking greater clarity around the claw-back.
With many of the key advisory staff who assisted former Assistant Treasurer, Josh Frydenberg, having moved with him to his new Resources, Energy and Northern Australia portfolio, O’Dwyer is expected to bring a fresh set of eyes to the LIF discussions.
The AFA has declared that, as currently proposed, the proposed three-year claw-back contained in the LIF transfers too much responsibility from insurers to the shoulders of advisers.
Further, AFA chief executive, Brad Fox has claimed the arrangements might compromise advisers’ best interests responsibilities.
Discussing his organisation’s upcoming meeting with the new Assistant Treasurer, Fox said it was important that Government appreciated that shifting of responsibility from the institution to the adviser threatened the future of advisers that own or are employed in small business advice practices.
“It also risks worsening the $1.6 billion annual cost to government caused by underinsurance if there are fewer advisers,” he said.
As well as discussing the LIF arrangements, the AFA and Financial Planning Association (FPA) are expected to discuss with O’Dwyer the broader issue of the findings of the Parliamentary Joint Committee on Corporations and Financial Services Inquiry into proposals to lift the professional, ethical and education standards in the financial services industry.
