Beau Riley

TAL, a leading Australian life insurance specialist, has reported strong uptake of its Risk Academy Masterclasses designed to help financial advisers prepare for the Financial Adviser Standards and Ethics Authority (FASEA) examinations.

Commencing in early July, the TAL Risk Academy FASEA Exam Masterclasses are travelling across the country, with initial sessions in Brisbane, Newcastle, Melbourne and Geelong fully subscribed and some reporting waitlists.

The TAL Risk Academy FASEA Exam Masterclasses focus on supporting advisers in their preparation for the exam, providing key information to be aware of, guidance on the materials to be across and advice on how to prepare in a way that will maximise the potential for first time success.

Existing advisers are required to pass the examination before 1 January 2021, while new entrants or those returning to the industry are required to pass the exam after they have completed a FASEA approved degree, and before commencing Quarter 3 in their professional year.

TAL Head of Licensees and Partnerships, Beau Riley, said the Masterclasses were playing an important role in addressing confusion and apprehension around the exam process itself, as well as the content the exams will cover.

“We understand this is something which falls outside of most advisers’ day to day experience, and yet it’s an essential step in enabling them to continue providing financial advice to their clients,” Mr Riley said.

“We know there is a huge amount of knowledge and expertise within the financial advice sector, and these courses are designed to help de-mystify the way in which that knowledge will be tested as part of FASEA compliance.

“The response from attendees to date has been overwhelmingly positive. We have had to double our sessions in many locations to accommodate the level of demand, demonstrating the importance of providing this support.”

As part of the FASEA Masterclass, attendees will sit a practice test which helps them feel confident they are well prepared for the exam itself.

The TAL Risk Academy FASEA Exam Masterclasses are led by TAL’s National Technical Managers, David Glen and Scott Hoger, and will continue to be rolled out across the country through to October.

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Beau Riley

TAL, a leading Australian life insurance specialist, is running a training course to help financial advisers understand and apply the Financial Planners and Advisers Code of Ethics, which all financial advisers must comply with from 1 January 2020.

Run by TAL National Technical Manager, David Glen, the ethics training course had almost 500 financial advisers attend in the first session, demonstrating advisers’ demand for education and resources in this area.

TAL Head of Licensees and Partnerships, Beau Riley, said the course was developed to help advisers fulfil their education requirements set by the Financial Adviser Standards and Ethics Authority (FASEA) as well as prepare advisers for the mandatory FASEA examination.

“From 1 January 2020, financial advisers must comply with a code of ethics and be covered by a scheme under which their compliance with the code of ethics will be monitored and enforced.

“Additionally, financial advisers must obtain nine Continuous Professional Development (CPD) hours in ‘Professionalism and Ethics’ and pass a FASEA examination, which consists of a section on ‘Applied Ethical and Professional Reasoning.’

“Currently, there are very few resources available to support financial advisers in understanding the code of ethics and how it applies to their day-to-day business dealings and customer interactions.

“Through our TAL Risk Academy ethics course, we want to equip advisers with a solid understanding of the scope of the code of ethics and the procedures they need to put in place to ensure they adhere to the code and demonstrate their adherence to others. This is particularly important so we can continue to deliver against community expectations and inspire consumer confidence in the financial advice industry as a whole.

“This course is just one of the ways we are helping financial advisers meet their FASEA requirements as part of our commitment to supporting a well-informed and quality financial advice sector,” said Mr Riley.

The course is available on-demand and is free to attend with one CPD hour available.

Enrol in the course or find out more information.

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Beau Riley

TAL, a leading Australian life insurance specialist, is running a series of national education workshops on business insurance advice to help financial advisers to better support their customers in this space.

Run through TAL’s industry leading product-agnostic Risk Academy, the workshops are presented by TAL’s National Technical Manager, Scott Hoger, and they focus on the technical skills needed to create effective business succession plans.

TAL Head of Licensees and Partnerships, Beau Riley, said the workshops were developed to help advisers identify key advice opportunities that exist in their customer base and raise awareness of the importance of business insurance to small to medium-sized business owners.

“Business insurance advice has grown significantly as a new avenue for financial advisers. While there are more than 2.3 million actively trading businesses in Australia[1], research indicates that less than 20% of Australian businesses are equipped with a succession plan[2]. This underinsurance gap presents an ideal opportunity for financial advisers to fulfil their Best Interests Duty and add value to their customers.

“By supporting customers to develop good succession plans, financial advisers can help customers maximise the value of their businesses and ensure they meet future needs.

“There is a clear need for business succession advice and financial advisers with the technical knowledge and skills in the space will differentiate themselves in the market. TAL Risk Academy’s Business Insurance Essentials workshops develop advisers’ skills to help them leverage this opportunity.”

TAL Risk Academy’s Business Insurance Essentials workshops travelled across Australia throughout March, ending in Perth on 21 March. Mr Riley said that feedback around the workshops has been positive, with advisers citing that the case study learning format made the technical topic easier to understand.

TAL Risk Academy will be running Business Insurance Masterclasses throughout April 2019 in Sydney, Brisbane, Adelaide, Perth, Melbourne and Canberra by David Glen, TAL National Technical Manager. The Masterclass carries five CPD accreditations for the Association of Financial Advisers (AFA) and five CPD accreditations for the Financial Planning Association of Australia (FPA).

The Business Insurance Masterclass attracts a small fee that will be donated to the Australian Business and Community Network (ABCN) Scholarship Foundation, a not-for-profit organisation that connects business with disadvantaged children to improve their education.

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Help your staff get the most from their super and insurance needs.

The 2017 superannuation changes provide new opportunities for employees to finance their insurance needs.

The new regime changes include the welcome abolition of the ‘10 per cent rule’. This rule prevented employees making additional deductible personal contributions into superannuation, even though the additional contributions did not breach the concessional (tax deductible) contributions caps.

Outline of new measures

From 1 July 2017, employees in receipt of employer provided superannuation may make additional deductible personal contributions into superannuation, provided that they do not exceed their concessional contribution caps. This means that any shortfall can be used to fund insurance arrangements in a tax-effective way.

For example, consider the situation where an employer makes a $15,000 contribution into a superannuation fund for an employee during the income-year ended 30 June 2018. This employee will now have the capacity to make an additional deductible personal contribution of $10,000 in 2018. If the premium on the requisite insurance for the employee is $5,000 per annum, the employee can make a deductible personal contribution of $5,000 to the superannuation fund, and have the superannuation fund pay the requisite premium.

How does this benefit the employee?

1. Substantial cost reduction

Funding insurance in superannuation in this way can substantially reduce the cost of insurance. Unfortunately, the cost of insurance outside superannuation is generally not deductible for tax purposes. If we structure an insurance arrangement in super funded by deductible personal contributions we achieve a substantially different cost outcome. For example, if we assume that the employee in our example earns $90,000 per annum, he will have a marginal tax rate of 39 per cent. In order to fund an annual insurance premium of $5,000, this employee must earn $8,197 before tax. Using the insurance in superannuation route, that employee can reduce the cost of insurance to $5,000 per annum! The cost reduction is based on marginal tax rates. The higher the marginal tax rate, the greater the reduction for the contributor.

2. No erosion of retirement savings

A major criticism is that insurance in superannuation erodes retirement savings. This is certainly true when we are using superannuation balances to make insurance premiums more affordable for clients. However, in this instance there is no erosion of retirement savings. The $15,000 employer contribution and the employee’s member balance are not eroded by this arrangement.

3. No Contributions Tax

Clients and advisers are often confused over the imposition of the 15% contributions tax in insurance in superannuation arrangements. The good news is that the above arrangement does not carry a 15% impost.

The personal contribution is included in the assessable income of the recipient superannuation fund, but there is an offsetting tax deduction within the superannuation fund for the premium paid. This means that the contributions tax cost is reduced to zero via this tax deduction. Our employee’s insurance arrangements do not therefore carry any costs in addition to the premium paid.

A word of warning: beware the notice formalities

Personal contributions into superannuation are presumed to be non-deductible (‘non-concessional’) contributions, unless the member issues the superannuation fund trustee with a notice of intention to claim a tax deduction. If a notice is not issued and the associated formalities are not completed within the prescribed time periods, no deduction may be claimed for the contribution in question. This means that clients need to observe these provisions meticulously and diligently to ensure that this valued tax deduction is not lost.

The way forward

The insurance in superannuation landscape will change dramatically with effect from 1 July 2017. Arrangements need to be reviewed carefully as part of the discharge of best interest duty to ensure that both opportunities and pitfalls are identified.

By David Glen, National Technical Manager

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