Insurance is looming large this year. The big players all seem to be in the same boat, waiting for someone in the boat or even in the water to make a move that will impact on them all.
Australia's underinsurance problem won't be fixed by alerting consumers to the problem, although the Investment and Financial Services Association is doing a good job of informing the public, but making it easy for people to do something about it. Cheaper products, easier to understand terms, easy to access policies - it's all part of the competitive edge that providers need. However, as we find once again - which backs up our insurance roundtable late last year - planners deal with only a handful of underwriters and so for insurers it's tough to break into the market without a real competitive advantage.
In other news, the Federal Government plans to spin off a third licence in financial planning - one that would essentially be 'product floggers'. The plan has the industry divided. On the one hand it would be true to label financial advice, but on the other hand it would mean consumers would likely flock to cheaper financial product providers for many of their financial planning needs.
More education would have to be provided by the FPA to ensure consumers who wanted more than a managed fund would know the difference between the financial planning designations. The idea of providing multiple designations is reliant on the public being able to make informed decisions when choosing a planner or product provider.
The FPA has said the Government's intentions are good but the proposal is problematic.
