The chair of the federal government’s small business committee says now is the time for the industry to “apply pressure” for changes to be made to the insurance reforms to ensure a better outcome for small businesses.
Speaking to Risk Adviser, federal Liberal MP Bert van Manen – a former financial adviser – said the industry reforms are “not set in stone” since they present many difficulties for advisers, especially small business owners.
“This is the time for feedback and for the industry to apply pressure,” Mr van Manen said.
“I appreciate [advisers’ concerns] and I think [the reforms] have the potential to significantly affect the capacity of businesses to grow over time and to make [the industry] attractive to new entrants.”
Life insurance specialists are needed, as are their businesses, in order to bring new life insurance advisers into the industry, Mr van Manen said.
“[Life insurance advice] is a different kettle of fish from the investments and superannuation side of the financial planning sector.”
He added that during conversations with advisers, he has outlined how he believes the reforms should be adjusted.
“My view, as I have expressed to a number of advisers, is that the commission should be set at 80/20… and the clawback period I think should come down to two years,” Mr van Manen said.
The clawback period should also not apply to an adviser where a policy has been written by another adviser, Mr van Manen said.