Australians will face a chain reaction of financial uncertainty over generations if proposed advice reforms are not legislated before the next federal election, warned the Council of Australian Life Insurers (CALI), which represents the Australian life insurance industry.
It is raising the alarm about the generational impacts of further delays to tranche two of the Federal Government’s Delivering Better Financial Outcomes package.
CALI CEO Christine Cupitt said in a statement, “Doing nothing won’t just hurt today. It’ll set in motion a chain reaction over the next 10, 20 and even 30 years as many Australians remain priced out of getting the right advice to secure their financial future and look after their loved ones.”
Independent research commissioned by CALI shows that the financial advice needs of Australians are not currently being met, particularly for those who can’t afford to pay for a financial adviser in a cost-of-living crisis.
The data highlighted that more than 40% of Australians want advice that’s more personalised and helps them to decide how much cover they need and the products that are best suited to them. Under proposed reforms, this is the kind of advice life insurers would be able to give their customers about their own products when they ask for it, and at no extra cost to the customer.
Under current laws, Australia’s life insurers are unable to legally provide customers with simple advice when they ask for it. Instead, they are restricted to providing advice that is general in nature only, which in many cases is not what the customer has asked for.
Less than a quarter of people said they want basic or general information only, proving how critical financial advice reforms are to giving Australians the kind of advice they want, when and where they want it.
Ms Cupitt added, “The barriers to getting advice remain far too high. Australia’s life insurers just want to be able to provide simple advice on their own products when people ask them to, at no extra cost to the customer.”