This week has seen an intense debate arising about independence, fee models and vertical integration. There were many very worthwhile comments, including one from James Hodder that was about 1,300 words long, and some great arguments on both sides from Pat, Matthew Ross, and James Smith. An honourable mention to all, but Wealth Pro had better stay out of this one.
This week’s comment of the week is going to Sue Laing, who provided some insight into Tuesday’s article about Woolworths life insurance.
In the article, financial planner Chris Guy went undercover to see how complex the supermarket’s insurance really was. He questioned why risk advisers are so regulated, when other companies aren’t. Here is Sue’s response:
“This is general advice and as much as it grates us on behalf of consumers, it's legal not to give advice on suitable levels of cover in the direct insurance process under a general advice licence. It's been happening for years. In fact if they (the Woolies call centre people) did help a client reach a decision on a sum insured THAT would be illegal! Unfortunately the client will never 'get' the fact that they need advice on the amounts suitable for their circumstances and so the result can be presumed to be inadequate in the majority of cases. It really is buyer beware in this area of our industry and always has been. Wait for the complaints on several levels, which will then tarnish all of us with the same brush.
There is nothing the ACCC would see wrong with this. Many products are sold on different playing fields. The point here is that you are not comparing product sale environments – you are comparing advice versus product flogging – apples and oranges.”
Guy responded to the comment and confirmed that in the very last seconds of his phone call, he was told "this is general advice", before they hung up.
Thanks to everyone who contributed their thoughts this week. Keep up the healthy (usually) debate.