AMP has announced its support of the Government’s intention to introduce a fiduciary-like obligation on all financial planners and advisers across the industry, requiring them to put their clients’ interests first.
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AMP Financial Services Managing Director Craig Meller said: “At AMP and AXA, financial advice is at the heart of what we do, and we have long believed there is no question that the pre-eminent responsibility of financial planners and advisers should be to act in their clients’ best interests.
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“Quality financial advice plays an important role in helping Australians achieve their goals in life, including enjoying a comfortable retirement and ensuring adequate insurance protection in the event things go wrong. The legal obligation, across the industry, to act in a client’s best interest is consistent with the standards expected of other professions and will play an important role in enhancing consumer confidence in the financial advice profession,“ said Mr Meller.
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“This policy initiative will provide consumers with significant protection from any perceived conflict of interest or inappropriate product recommendations,” said Mr Meller.
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Both AMP and AXA removed in-built commissions from new superannuation, pension and investment business in mid 2010.
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However, Mr Meller said the Government’s proposal to ban commissions on life insurance paid for within superannuation, including income protection and disability cover, goes too far and it is not clear what problem is being addressed.
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“The proposal to ban commissions on life insurance within superannuation is ineffective public policy because it will inevitably exacerbate Australians’ chronic level of underinsurance.
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“Without the encouragement and support of a financial planner many people do not appreciate the necessity to arrange adequate insurance.
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“Arranging insurance can be complex and confronting for many people and financial planners make it easy for people to get the cover they need. In addition, society as a whole benefits from people taking steps to protect themselves financially from unforseen circumstances.
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“An unintended consequence of this policy is likely to be the transfer of a greater burden to taxpayers who will be required to meet the social costs of underinsurance.
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“An alternative would be to consider policy initiatives that would increase Australians overall level of insurance cover,” said Mr Meller.
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Today’s announcement also included a range of proposals where AMP is yet to develop a detailed understanding of the policies and their impacts.
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AMP looks forward to continuing working and consulting with the Government and the Opposition as the new policy proposals announced today go through the legislative review process.