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Upcoming advice review offers chance to ‘reset’ industry: AMP – Life Insurance – Insurance News

AMP has pressed the need for stakeholder “collaboration” when the Treasury-led Quality of Advice Review takes place next year.

AMP Advice MD Matt Lawler says the undertaking – a recommendation from the Hayne royal commission – is an opportunity to collectively implement constructive and positive changes.

The industry is grappling with an exodus of advisers, who are quitting for reasons including rising costs and increased regulations.

“The Federal Government’s upcoming Quality of Advice review will be a critical moment for the industry and for Australians,” Mr Lawler said.

“It presents the opportunity to reset the course for how financial advice is regulated and how it is delivered.

“We need industry, government and regulators working together.”

He says the terms of reference for the review should include identifying opportunities for deregulation, pointing out the need for a “regulatory balance” to support the industry.

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“We require reform that benefits both consumers and advisers, rather than perpetuating an unsustainable regulatory burden,” Mr Lawler said.

“There is also an opportunity for the industry to work together to come up with ideas to help reduce the unnecessary complexity in the advice process.”

AMP completed the $3 billion sale of its life arm to Resolution Life last year, but it retains a link to life insurance via its advice businesses.

Mr Lawler says Australia can learn from the experience of other markets, such as the UK, which has gone through a regulatory overhaul following the 2008 global financial crisis.

“Australia requires a thriving community of highly professional and trusted advisers,” he said. “Despite all the disruption of recent years, financial advice has a strong future in Australia.

“But we must now collectively turn our attention to how we can support a new era of growth for face-to-face financial advice. It’s in all our interests.”

The Hayne royal commission in its final report says the Quality of Advice review should preferably be completed by June 30 next year but no later than December 31 2022.

It also says the review into “conflicted remuneration related to life insurance products” should consider further reducing the cap on commissions. The cap should ultimately be reduced to zero unless there is a clear justification for retaining those commissions.

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