Sinodinos all for insurance commissions

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Assistant Treasurer Arthur Sinodinos was met by an eruption of applause as he restated the need for insurance commissions, at the AFA National Conference.

In his first public address, Sinodinos said that addressing insurance remuneration was one of the Government’s top priorities.

“The differing in insurance remunerations inside and outside superannuation creates confusion,” Sinodinos said. “The Ripoll Inquiry did not recommend the banning of commissions paid for risk insurance products. And the recent experience in the UK indicates that banning commissions on risk insurance just doesn't work, and they have since reversed the ban.”

He said that banning insurance commissions would increase costs for consumers, limit their choices and “leave many people worse off”.

Sinodinos also assured advisers that the Government would address grandfathering arrangements “in an expeditious manner”.

Conference attendee and Asteron Life executive manager Mark Vilo welcomed Sinodinos’ speech and the transparency that he showed. But he questioned how high up the Government’s agenda the financial services industry really was.

Vilo said that it was great that Sinodinos was there, and that people he had spoken to were happy the Government wouldn’t go back on their promises. However, he said that the industry needed to see some “symbols”, and that the Government just needed to do something.

Sinodinos made it clear that the Government would not be making any decisions until it had heard the views of the industry and ensured that these views were “fairly balanced against the effects of conflicted remuneration, both on investors and on the viability of the industry more broadly”.

Other key points in Sinodinos’ speech were:

  • That the removal of opt-in requirements is at the top of his agenda
  • That “Ministerial Advisory Councils” would be created in every portfolio – including financial services – made up of business people, consumers and not-for-profits. They will be responsible for finding examples of unnecessary red tape and solutions on how it can be removed
  • That the performance of senior public servants will be assessed on their success in identifying and reducing unnecessary red tape.

 

  • Alistair on 14/10/2013 10:12:44 AM

    Isn't it refreshing to finally have a politician who actually understands such a topic and hopefully the industry that is Financial Services and Financial Planning principles. Hopefully Arthur also understands that competition is important and meaningful regulation needs to be part of the equation going forward for our industry.
    Unlike the previous pack of looneys who would only cater for the ISN and their union mates and attempt to smash every small business as its legacy.
    I do hope that matters like Opt in is thrown out as promised by the coalition and nonsense regulation and disclosure in many forms from an SOA to fund managers to ourselves are given meaning with a simplified method that does not impose burdens on us as advisers and to our small businesses but are delivered by platforms in a systematic process after the production and implementation of the advice document.
    By the way, the FPA which has just posted a surplus should use that surplus perhaps in a meaningful way to promote the virtues of our industry to the public. As a member, I would like to see more from our association as their efforts are at this point mediocre instead of outstanding. Needless to say we should not have an association that aspires to mediocrity when it comes to representing us as an industry.

  • John a on 14/10/2013 1:29:52 PM

    At long last we have a political party that uses common sense to make decisions (and not based on an agenda from industry super funds and unions)

  • Warren on 14/10/2013 2:17:10 PM

    Gives me heart, it is possible we can get back to what we are best at - having a chat and proposing a solution.I will never forget that strange person in my office (compliance) telling me that it is not the advice that matters but the process!! and just to substantiate his existence reported that my files were messy!!
    Come on Libs do something now.

  • M Perera on 15/10/2013 9:42:29 AM

    OMG at last common sense prevails, sooner the better before we loose all the good adviser leave the industry . last week I transfer insurance cover to CFS and I have do all the work free of charge. this is so frustrating how long I am gone keep doing this ?

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