MAGAZINE OF CHOICE FOR AUSTRALIA’S WEALTH INDUSTRY
www.moneymanagement.com.au
Vol. 35 No 19 | October 21, 2021
BOUTIQUES
ETFS
Staying small
Millennial growth
18
LIFE INSURANCE
26
TOOLBOX
Multi-factor investing
Could financial advisers move to general advice? BY CHRIS DASTOOR
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The new era of income protection INCOME protection products have been the bane of the life insurance industry and just in the last financial year lost $345.5 million and $1.29 billion the year prior. But with the launch of the newly-designed products the question is whether they will be a more sustainable offering and if the industry can shake off poor practices. MLC general manager for retail distribution, Michael Downey, believed the life insurance industry was more mature now and that insurers would not fall into the trap of trying to chase market share for the sake of it. While the new products are a chance for a reinvention of the sector, it is no secret that financial advisers will face further administrative burden from the products’ introduction. Most insurers had launched two or three variations of the new products, had stricter definitions, and required clients to reapply every five years. HH Wealth director and financial adviser, Chris Holme, said: “There’s a fair bit more work that you need to do in identifying what suits the client, how to apply for it, whether they actually have existing income protection, and then post that having to review it every five years. “That adds another administrative burden but it can be a positive thing because we’re taking into account more needs of the client and tailoring something that is actually in their best interest.”
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MOVING to general advice could be an alternative to providing holistic advice for advisers disgruntled with the current regulatory requirements, but they will have to get past the stigma, according to a risk broker who has made the shift. Tony Smilevski, insurance broker for Tony Insurance, said the Financial Adviser Standards and Ethics Authority (FASEA) education requirements, as well other regulatory demands, had motivated him personally to pursue providing general advice instead of personal advice. “Personally, I’ve done full advice and general advice when it comes to [risk] insurance [and with a few of the bigger licensees] I’ve done holistic advice,” Smilevski said. “Recently I moved away from
doing full advice because of everything going on. I’ve passed my FASEA exam, I’ve got my education requirements ticked off but I thought there was no point going on doing risk-only advice in the postFASEA world, it didn’t make sense. “I know a lot of advisers are in that boat where they don’t know what to do; they’re either not passing the FASEA exam or they just not seeing it as being profitable to run a business that maybe specialises in risk-only [advice].” Smilevski said it was a “massive mental shift” for an adviser to look at general advice as an alternative option. “Because the way we currently look at it is general advice instead of personal advice is not good enough,” Smilevski said. Continued on page 3
Harassment affecting over half of female employees BY LAURA DEW
MORE than half of female employees in financial services have experienced, or know someone who has, harassment or sexism in the workplace, according to a report by the Financial Services Institute of Australasia (FINSIA). According to a report which surveyed almost 800 members working in financial services, there were more incidences in the last five years combined with increased discomfort in raising issues of gender equality. Some 51% of women said they had experienced or witnessed sexual harassment or sexism at work and 13% said they had ‘often’ done so. Just over a third of women said they had ‘never’ experienced or witnessed it. Continued on page 3
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