AFRM News Update: AFRM responds to announcement of new framework

Posted by AFRM on 10 July 2015

The last week has a been a big week for our industry with the announcement of new industry framework. AFRM Directors are still discussing the implications of these changes for our business and we will keep you updated.  Although we believe industry change is needed, the poor ethics of a minority of advisers has led to more regulation for all. We will work with our internal team as well as with our referral partners to resolve any implications for our businesses and clients. What is apparent though, is that AFRM is well positioned to manage change given our size and the professionalism we have always displayed in our advice processes.  AFRM has been working on a hybrid commission model pretty well since inception, however with hybrid rates being reduce to a maximum initial payment of 60%, there will need to be cost adjustments and internally, some productivity challenges. Just another challenge to being able to provide a market leading advice practice in a cost heavy process and remain viable!  We’ll keep you updated.

New life insurance industry framework

If you’re interested in reading about the new framework here are 5 articles we’ve picked for you:

  • Risk Info reports: New Life Insurance Framework Announced: A maximum 60 per cent hybrid commission structure headlines a package of life insurance remuneration and other reform proposals announced by Assistant Treasurer, Josh Frydenberg – click here
  • Money Management reports: LIF workable but practices will come under pressure – click here
  • ABC reports: Life insurance changes could cost financial planners $250m a year – click here
  • Risk Info reports: Industry, Consumer Responses to New Life Insurance Framework – click here
  • Life+Health Insurance News reports: Advisers fear clawback proposals – click here

New claim statistics

AFRM – Over $75 million in claims in total and over $17 million in the 2014/15 financial year, with currently 85 claims in progress.

Industry – 75,000 claims to a total of $5 billion in claim payments in 2014