The life insurance advice sector has been battling a host of issues, including an ill-fitting education program, remuneration uncertainty and product design flaws, for some time. Is it in a death spiral, or is there a path to sustainability for this crucial arm of the advice industry?
The government’s position on what to do with the Safe Harbour Steps is no longer clear, but the chances of seeing it supplanted by the existing Code of Ethics are slim according to the FAAA’s policy chief Phil Anderson.
The potential for artificial intelligence to aid the delivery of financial advice is being recognised globally, and should lead to a “redefinition” of the sector according to commentators.
Even when thousands more advisers left the industry in 2022, bringing the cohort down from 28,000 in 2018 to a total of around 17,000, there was still no shortage according to the government’s own skills commission.
Of the 8,946 practitioner advisers who belonged to either industry group before their April merger, 8,093 have renewed their membership with the merged entity. The FAAA was “very pleased” with the 90 per cent renewal rate, its CEO said, urging stragglers to renew before a grace period ends next month.
The minister was peppered with questions about phases 1 and 2 of the the government’s advice review response, as well as specialist accreditation and data access during a series of events in the sunshine state.
The controversial, long-delayed scheme doesn’t protect consumers from high profile managed investment scheme failures like Sterling and Timbercorp, FAAA CEO Sarah Abood said, and could end up adding another layer of unfair fees at the feet of advisers.
Back in 2019, then-FPA CEO Dante De Gori and Tangelo Advice Consulting’s Conrad Travers engaged the ATO to see if it would be open to updating guidance on the tax deductibility of upfront advice fees. By the middle of this year, we should see the outcome.
“There’s so much pain, so much division on this one,” FAAA CEO Sarah Abood said of the proposed exemption. “It actually really upsets me, as I know it upsets many members.”
Consumers will be bamboozled by the government’s plan to divide advisers into “experienced” and “relevant” camps, the association explained. That, and the need for a sunset clause, mean the current proposal needs work.
The new association will be branded with its key purpose – providing a unified voice representing advisers – reflected in speech bubbles over the ‘A’s in its name.
