The majority of advisers and other industry stakeholders in Australia appear more optimistic about the future of their own business as well as the future of the broader life insurance and financial advice sectors under a returned Coalition Government.
One of the implications of the Australian election result is that the Coalition will be the incumbent Government when ASIC hands down its 2021 review into the impact of the Life Insurance Framework reforms.
Unlike the perspective outlined by Commissioner Hayne in his final report stemming from the Banking Royal Commission, which suggested ASIC should consider its 2021 review from the perspective of whether the Life Insurance Framework reforms have contributed to reducing underinsurance, the returned Coalition Government’s position is that ASIC should instead consider the impact of the LIF reforms from the perspective of whether they have contributed to better aligning the interests of advisers and consumers (see: Government to Consider Mandating Level Commissions for Risk).
…last weekend’s election result has delayed the exit plans of many risk-focussed advisers
While many advisers have indicated they still hold significant concerns around the future viability of risk-focussed advice practices – as a result of both the commission caps imposed by the Life Insurance Framework reforms and the minimum future education standards required by FASEA – they are more optimistic about the future of their business today than had the ALP been victorious on the weekend. This greater optimism stems in part from Labor’s previously-stated position that it would seek to ban risk commissions entirely if ASIC’s 2021 review delivered an adverse finding on the impact of the LIF reforms (see: Labor Reaffirms Position on Future of Risk Commissions).
One industry stakeholder has suggested to Riskinfo that last weekend’s election result has delayed the exit plans of many risk-focussed advisers from the sector and that there will now be more time for advisers and the industry in general to find ways to adapt to the new regulatory environment that is being phased in with the LIF reforms and FASEA’s minimum adviser education standards.