Australians will face a chain reaction of financial uncertainty over generations if proposed advice reforms aren’t legislated before the next federal election.
The Council of Australian Life Insurers (CALI) is raising the alarm about the generational impacts of further delays to tranche two of the Federal Government’s Delivering Better Financial Outcomes package.
“Without these reforms, millions of Australians and their families will be left behind in financial limbo,” said CALI CEO Christine Cupitt.
“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,” she said.
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 highlights that more than 40 per cent of Australians want advice that’s more personalised and helps them make a decision about 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.
“Australians have made it clear. They want these changes, and they want them now more than ever.
People need someone to talk to about their financial future. They’re already dealing with sustained cost of living pressures, we shouldn’t be turning our backs on them as they try to take care of their loved ones.”
Under current laws, Australia’s life insurers are unable to legally provide customers with simple advice when they ask for it. Instead, they’re restricted to providing advice that is general in nature only, which in many cases isn’t what the customer has asked for.
Less than a quarter of people say 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.
“We have an advice accessibility crisis in this country. It’s leaving too many people underinsured and unprotected because they can’t afford to get the right advice about the best cover for them.
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.”
In the past three months alone, more than a quarter of Australians considered getting financial advice about life insurance but just 5 per cent actually got it.