MLC Life Insurance welcomes the Quality of Advice Review (QAR) Final Report and the Albanese Government’s commitment to consulting on the report’s findings.

Kent Griffin, Managing Director of MLC Life Insurance, congratulated Independent Reviewer Michelle Levy and Treasury on the recommendations focused on making financial advice more accessible to Australians to secure their financial future including the life insurance protection that they need.

“Ensuring access to affordable financial advice is critical to protecting all Australians.

The QAR Final Report acknowledges that the current framework has made it difficult for many Australians to access and afford quality financial advice. Those that could benefit from financial advice the most, including families with mortgages and those approaching retirement, often can’t access the financial advice that would make a material difference to their quality of life now and in later years.

We welcome the commitment from the Assistant Treasurer and Minister for Financial Services, The Hon Stephen Jones MP, to consult with industry and consumers on the implementation of the report findings.”

Lack of access to affordable financial advice also leaves many Australians without the protection of life insurance tailored to their individual needs. APRA has observed a decline of retail advised life insurance new business volumes of almost 50% over the last five years, linked in part to changes in the regulatory environment.

MLC Life Insurance paid $1.1 billion to our customers in the 12 months to June 2022, providing a helping hand when they needed it the most. The life insurance industry paid over $10.9 billion to 85,345 Australians who made a claim over the same period. Without that support, there will be an increase in reliance on the taxpayer and/or a reduction in the quality of life for all those who would otherwise benefit.

Kent continued:

“Declining coverage and a lack of appropriate insurance do not impact the number of claimable events that take place, but redistribute the cost to the individual, society and government, hurting all Australians.”

Without the timely implementation of the QAR recommendations, the outlook for consumers who need life insurance cover under the status quo will continue to be impacted:

1. Fewer Australians will have adequate life insurance, they will pay more for it, and they will be covered for less.
2. Fewer financial advisers will service a smaller number of older, wealthier clients who can afford the rising cost of advice. Many Australians will miss out. Those without advice are often the ones who need it the most, including families with mortgages and those approaching retirement.
3. Life insurance through default superannuation is effective and efficient, but rising levels of indebtedness, particularly due to increases in property prices, mortgages and rising interest rates mean default group cover is unlikely to have kept pace and members should be able to access advice which responds to their needs on an affordable basis. Australians need access to affordable financial advice to ensure they can adequately protect their loves ones, should the worst happen.

Customers also demand greater levels of support from their life insurer than can be provided under the current financial advice regulations, leading to poor customer service outcomes.

Kent continued:

“If our customers ask us for help based on their personal circumstances, we are limited in the support we can provide. The QAR Final Report recommendations would enable Australians to get the support they need from their life insurer or superannuation fund."