Members of the risk advice community have questioned whether the interests of FSC members and AFA members are aligned in their collaboration on the Life Insurance and Advice Working Group (LIAWG).
In a submission to the LIAWG, Perera Crowther Financial Services director Sam Perera warned independent chairman John Trowbridge of the agenda of some FSC members.
“The biggest challenge for you [Mr Trowbridge] as the independent chair will be to thwart the efforts of certain representatives of the FSC who wish to abuse the goodwill of the AFA who have come to the table to make sensible strides in the remuneration and quality advice debate,” the submission said.
“It is imperative to delineate the issue of consumers receiving advice that is in their best interests and free of conflicts from the wishes of the insurers who appear to be hijacking the current debate in order to reduce their cost of sales to improve their profitability."
In a separate submission, AFA immediate past president and Joe Nowak Financial Services managing director Michael Nowak expressed concern over the number of product providers seemingly supporting a level 20 per cent upfront and ongoing remuneration model.
“It is essential that greater scrutiny of life insurance providers be made by the LIAWG in order to obtain an optimal outcome for the long-term viability of life insurance,” the submission said.
“In the marketplace advisers are talking about how bank-aligned life insurance product providers are the drivers of the 20 per cent level commission model.
“Given these providers have large existing distribution channels, does the LIAWG support an outcome that may see the non-aligned strategic life advisers placed at a huge competitive disadvantage?” the submission asked.
“The LIAWG will be responsible for making such momentous decisions, as I believe the group must be sure that it is dealing with industry issues, not just specific issues faced by some product providers,” the submission said.