The founder of life/risk focused planning group, Synchron, Don Trapnell has repeated his call for life/risk advice to be treated differently under the Financial Adviser Standards and Ethics Authority (FASEA) requirements.
In an analysis of the industry, Trapnell has welcomed the Australian Securities and Investments Commission’s (ASIC’s) use of external consultants to help it understand issues around access to advice, at the same time as pointing to the anomalous situation facing specialist life/risk advisers.
Discussing the exodus of life/risk advisers in the current environment, he said that remuneration was one factor together with the general sustainability of the life insurance industry but a greater factor was them being forced to meet educational standards “that bear little relevance to the work they do”.
“It’s a bit like asking qualified carpenters to study plumbing. Both trades need to know where they sit in relation to house construction, but they should not be forced to learn how to build the whole house,” Trapnell said. “It therefore remains our firm belief that we need to work together to arrive at the sensible separation of financial planning advice from life insurance advice.”
“ASIC has said it wants Australians to have access to affordable, quality personal financial advice that meets their needs, which implies it is looking for solutions – and I’d go so far as to say that’s what we all want,” he said.
“We believe that affordable, quality, personal advice needs to be delivered by advisers who are well-educated and experienced – and by that we mean appropriately educated, in line with the advice being given, and appropriately experienced, in the field in which the adviser works.”
“…to our way of thinking, this should translate to financial planners holding appropriate financial planning qualifications and risk advisers holding appropriate life insurance qualifications. It should also allow for advisers to study for FASEA exams that cover the areas in which they work, and not the areas in which they don’t. Only those advisers who want to give both types of advice, and many will, should be qualified in both disciplines.”
