Industry body questioned over direct insurance tie-up

Andreas Kettemann, director of Western Australian multidisciplinary practice Carbon Group, called out the FPA’s recent advertising campaign in its Money & Life member publication with life insurer Nobleoak in a communication to the industry association seen by ifa.

The insurer, which is currently gearing up for an IPO on the ASX, has positioned itself as an alternative challenger brand in the wake of the royal commission and sells primarily through direct channels.

“Could you please elaborate on why the FPA is advertising for direct life insurance when their members are relying on retail life insurance sales?” Mr Ketteman said.

“Could you please explain how this is helpful? You realise that the recipients are financial planners who have access to life insurance products?”

In a response to Mr Ketteman, a spokesperson for the FPA said the campaign had been intended to target advisers’ personal insurance needs and was not meant to be targeted at FPA members’ clients.

The spokesperson conceded the industry body had received “mixed feedback” from members about the campaign, and that the magazine’s publisher would be “more discerning” about advertising dollars in the future.

FPA chief executive Dante De Gori told ifa the campaign, which appeared in the June/July issue of the member magazine, had caused a “misunderstanding” among some of the association’s membership.

“The FPA would not and has never actively promoted direct offers to our members’ clients,” Mr De Gori said.

“The FPA represents the interests of Australia’s professional community of financial planners and the public. Money & Life is a valuable resource for professionals working in the financial planning profession to stay ahead of industry trends, succeed in their career and grow their financial planning practice.”

The move comes at a challenging time for the risk advice sector, with retail insurance sales having almost halved over the last seven years as the LIF makes insurance advice increasingly uneconomic. Mr Ketteman’s dealer group Synchron has also indicated its risk new business has dropped $4 million over the last financial year alone.

Peter Johnston, executive director of the AIOFP of which Mr Kettemann is also a member, said it was important for advisers to take a look at “what an association actually does on the ground instead of the promotional optics”.

“Direct product selling is an anathema to an adviser’s livelihood and should be rejected, not promoted, by an organisation describing itself as supposedly supporting advisers’ best interests,” Mr Johnston said.