Lobby groups with vested interests sparked the endless debate around adviser remuneration, which is clouding the issue of inadequate levels of retirement savings and chronic levels of underinsurance, according to the Association of Financial Advisers‘ (AFA’s) chief executive, Richard Klipin (pictured).
The AFA has again called on the Federal Government to consider the impact the commissions ban on insurance products would have on consumers.
“These groups clearly have their own agenda and are working in their own, rather than the consumer’s, best interests,” Klipin said.
“We are calling on [the Financial Services Minister Bill] Shorten to work with us to help protect consumers against the financial impact of death or disaster and to resist tinkering with a remuneration system which is not broken,” he said.
“There is now a plethora of research supporting the fact that if commissions are banned, many ordinary Australians will not seek life insurance advice,” Klipin added.
His comments followed the release of a survey conducted by Zurich last December, which found around 60 per cent of participants were less likely to take up insurance if they were forced to pay an up-front fee.
According to the Lifewise/NATSEM Underinsurance Report released, underinsurance is expected to cost the Federal Government $1.3 billion over the next decade.
