Council of Australian Life Insurers CEO Calls for Insurers to Provide Simple Advice on Their Products

The CEO of the Council of Australian Life Insurers (CALI), Christine Cupitt, has called for insurers to be allowed to provide simple advice on their own products in order to address the advice gap in Australia. Cupitt made this plea before the Senate economics legislation committee, highlighting the “advice accessibility crisis” in the country.

According to Cupitt, many Australians are facing financial uncertainty due to rising cost-of-living pressures, making it crucial for them to seek professional advice on their life insurance. However, the cost of such advice can be prohibitive, with some estimates exceeding $3,000.

Citing CALI’s research, Cupitt revealed that 7 in 10 Australians are worried about the impact of cost of living on their ability to afford life insurance. She emphasized the importance of affordable advice in empowering individuals to make informed decisions about their financial future.

Despite acknowledging the valuable role of financial advisers in providing personalized and holistic financial plans, Cupitt noted that there is a shortage of advisers in the country. She proposed that insurers should be allowed to offer simple advice on their products, with appropriate limitations and consumer protections in place.

While more complex financial matters would still be referred to financial planners, Cupitt argued that insurers should be able to provide basic advice to customers who cannot afford or do not require a comprehensive financial plan. This move, she said, would complement the work of financial advisers rather than compete with them.

The government is currently working on the next phase of financial advice reforms, which may include allowing banks and insurers to provide limited advice. Financial Services Minister Stephen Jones has expressed support for the creation of a new class of financial advice providers, known as “qualified advisers,” who would be responsible for the advice provided by licensed financial institutions.

While these proposed changes aim to give consumers more options and unwind some of the strict rules imposed by the Hayne royal commission, the draft legislation for these reforms has yet to be finalized. Stay tuned for updates on this evolving story.