The Association of Financial Advisers has argued that the Hayne commission interim report “does not suggest a good understanding of financial advice”.
In an email sent to members, AFA chief executive Philip Kewin argued it was apparent upon reviewing the Volume 1 section on financial advice from the report that the Hayne commission hasn’t acknowledged the AFA’s submissions to date.
“They have specifically focused attention on issues related to adviser remuneration, including such important issues as life insurance commissions, ongoing adviser service fees and grandfathered commissions,” Mr Kewin said.
“While we understand the myriad of complexities and issues with adviser service fees and grandfathered commissions we cannot see any justification for a review, let alone removal of life insurance commissions.”
The AFA noted it will have more to say in its submission with respect to the flaws in the interim report’s position on grandfathered commissions.
“We will be working hard to ensure that the level of understand of these issues is improved and that any recommendations in the final report are based upon a real understanding of the issues and the implications for ensuring the best outcome for clients,” Mr Kewin said.
The AFA also strongly argued in support of the existing Life Insurance Framework arrangements, reassuring members that they “should be in no doubt” that it will be strongly arguing for their retention.
“We anticipate that some members will have a strong interest in Question 8 which relates to the continuation of life insurance commissions, Question 10 on the direct sale of life insurance and Question 12 on approved product lists,” Mr Kewin said.
“Other members will have a detailed interest in the issues that are raised with respect to claims handling and insurance in superannuation.”
Last month, the Hayne commission released its insurance policy questions following the conclusion of the hearings.
The questions covered a broad range of topics including product design, disclosure, sales, add-on insurance, claims handling, insurance in superannuation, scope of the Insurance Contracts Act, regulation, and compliance and breach reporting.
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