Industry 'haemorrhaging' advisers and leaving Australians without access to protection

MLC Life Insurance has called for QAR reviewer Michelle Levy and Treasury to look at how more Australians can access financial advice, regardless of their wealth.

This week, MLC's general manager for retail distribution partnerships, Michael Downey, said "successive and ongoing" regulation is leaving Australians without protection and vulnerable to life events.

“Extensive research shows unequivocally that people have greater peace of mind when they receive quality, life-long, financial advice. But after years of inordinate regulation, however well intentioned, we are haemorrhaging advisers who provide critical advice to clients in their time of need. The trend is not sustainable," Mr Downey said.

“Unless we take steps to reduce the cost of advice, I have a real fear that only the wealthiest Australians will be able to afford to see an adviser. That means fewer people will have appropriate life insurance protection for their needs and they will fall through the cracks. Where is the fairness in that outcome?”

Through the QAR, MLC Life Insurance is advocating that commissions must continue to remain an option that supports everyday Australians, scaled advice should be tailored to the specific needs of customers and that the cost of obtaining personal financial advice should be tax deductible.

MLC Life Insurance has also called for the contentious Life Insurance Framework (LIF) to be maintained, just weeks after the Financial Services Council (FSC) recommended it be retained "because it has been successful in managing potential conflicts between advisers and consumers by providing an affordable mechanism for consumers to get personal advice on life insurance".

“We must do what’s right for our customers and their advisers, which means ensuring more advice, not less," Mr Downey continued.

"The recommendations we have put forward to Michelle Levy and her team are reasonable and we look forward to working closely with them over the coming months to ensure a positive outcome for all Australians.”

Mr Downey's comments come after the Association of Financial Advisers (AFA) CEO Phil Anderson said that the QAR must look at the "significant layers of bureaucracy" forced on the advice sector in recent years.

On the latest episode of the ifa Show podcast, Mr Anderson said it doesn't surprise him that many of the QAR submissions issued to Treasury have recommended the regulatory burden placed on planners be reviewed.

"When you think about it, we've had such a period of vigorous, almost constant regulatory reform that is just built over the top of each other," Mr Anderson said.

"So we've had the FOFA reforms, we've had the LIF reforms, we've had professional standards. We've had all the recommendations out of the Royal Commission. On top of that, you've had DDO and a range of other reforms. It's all just one layer on top of the other layer."

Listen to the full episode with Mr Anderson here.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.