Recent findings from the Association of Financial Advisers (AFA) research, Risking Everything, has revealed that:
1) Consumers with an adviser are more confident, have more appropriate levels of insurance and greater control over their financial future.2) With two in 10 consumers in an advice relationship, Australians are under-advised and under-insured. The concern is that a number of the proposed FOFA reforms will ultimately exacerbate these issues.
3) There is a clear need to educate consumers on risk – identifying, managing and migrating risk so as to better protect themselves, their families and their assets
Risking Everything was conducted by Core Data and sponsored by AIA Australia for the AFA. It surveyed corporate super and life insurance clients.The Association of Financial Advisers (AFA)’s Chief Executive Officer Richard Klipin said the research findings confirm that some of the Government’s proposed Future of Financial Advice (FOFA) reforms run counter to FOFA’s primary objective – that is: to create better outcomes for consumers.
“The fires, floods, earthquakes, tsunamis and nuclear leaks of the past 12 months are bringing into stark focus the issues of risk for the Australian community,” he said. “Risk management must be part of the national agenda for families, businesses, companies, governments and regions and yet, our research indicates that if bans on commissions go ahead, fewer people may get financial advice and therefore fewer may have appropriate levels of life insurance.”
Klipin said this was very disturbing given the already dangerously low number of Australians currently receiving advice.
“Only two in 10 Australians currently receive advice relating to their life insurance needs,” he said. “This level will almost certainly drop even further if aspects of the FOFA reforms are passed through legislation. What that could ultimately mean is more people queuing up for Centrelink benefits – and that’s something Australia simply cannot afford.”
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