Australian consumers are the big winners in a significant shake-up of financial advice laws that will allow life insurers to provide simple advice directly to their customers.
The Council of Australian Life Insurers (CALI) strongly supports the Federal Government’s announcement today on its Delivering Better Financial Outcomes package.
“These changes will ensure Australians have more choice and better access to affordable advice when they need it most, so they can make informed decisions about how to protect their future,” said CALI CEO Christine Cupitt.
“Through qualified advisers, life insurers will be able to provide simple advice directly to their customers to give Australians peace of mind as they make some of life’s biggest decisions.”
Qualified advisers employed by Australia’s life insurers will be able to advise on less complex matters and complement the important work being done by professional financial advisers across the country.
“Australians will no longer have to wait in line to pay $3,500 on average for financial advice. For many people, getting advice has been far too expensive and inaccessible with just 1,000 financial advisers nationwide who help people navigate life insurance products,” Ms Cupitt said.
“Cost of living pressures are already putting Australians under financial stress, and getting advice on how to best protect and secure the future for themselves and their loved ones shouldn’t be another hurdle they face.”
The changes are critical to expanding the type of advice life insurers are allowed to provide their customers to help deliver the protection and certainty people need on their best and worst days.
“Of course, this will only happen with appropriate limitations and strong consumer protections to ensure better outcomes for Australian workers and their families.”
Qualified advisers will be required to meet an education standard mandated by the Federal Government along with other important safeguards.
Independent research commissioned by CALI shows that more than 90 per cent of Australians are satisfied with the service they receive from their life insurers directly, and more than half (51%) believe that getting life insurance advice would be more accessible and affordable if insurers themselves were able to provide it when asked.
“Almost one in two Australians say the main driver for obtaining life insurance is for the financial protection and sense of security it provides loved ones, and we must ensure they’re getting the right advice to make that a reality.”
According to the research conducted by 89 Degrees East, in the past three months alone almost a third of Australians (32%) have shown an interest in getting professional financial advice but just six per cent have actually received it.
Alarmingly, more than a third (34%) of people lean on their loved ones to tell them what to do about their life insurance cover rather than speaking to their life insurer or getting advice through their superannuation fund.
When reviewing their cover, people are just as likely to go online and use search engines and digital calculators as they are to contact their life insurer directly. Just 38 per cent would speak to a financial adviser.
Only eight per cent of people would turn to social media, but that figure is much higher for younger Australians. Almost 20 per cent of those aged 18 to 24 years would determine their life insurance needs by using social media.
As the leading voice of life insurance in Australia, CALI advocates for national policy settings that expand Australians’ access to the protection that suits them most.
“We’ve worked tirelessly with the Federal Government over many months to ensure changes to financial advice laws benefit Australians by giving them more choice, more information and more certainty. We’re thrilled the Federal Government has heard the message and is ready to act.”