Advice is key to purchasing insurance, particularly when the establishment of a self-managed superannuation fund (SMSF) is involved, according to Rob Lavery, technical manager for wealthdigital.
Lavery pointed to the Australian Securities and Investments Commission’s (ASIC’s) report 587, which highlighted issues with purchasing insurance without advice, such as high policy lapse rates, poor product choices and poor claim results.
“The success rates of claims dropped 9 per cent when non-intermediated, almost half of all direct policies lapsed in the first three years and two-thirds of consumers who purchased life insurance directly did not understand which exclusions applies to their policy,” he said.
Lavery said that according to ASIC, 20 per cent of SMSF members did not even consider their insurance needs when they established their SMSF.
ASIC’s report 575 highlighted a strong focus on insurance advice, which included retaining insurance in the client’s previous fund, but if members did not receive advice from a licensed planner, they would be left without the support they needed to make those decisions.
“With so many issues to consider, it quickly becomes clear that consumers are best served by engaging a professional to lead them through this minefield,” he said.
BlackRock boss Larry Fink praised Australia’s superannuation system in his annual chairman’s letter.
The prudential regulator has announced it will publish new expenditure data of superannuation funds, providing details on expenses like advice, director remuneration, and payments to unions.
Affirming the UK’s growing attractiveness as an investment destination, a number of Australia’s largest investors recently joined the UK Foreign Secretary for an exclusive briefing in Canberra to discuss further opportunities for trade and growth.
The specialist superannuation law advisory practice is set to wind up, with managing partner Jonathan Steffanoni planning to bring a new offering to market.
Add new comment