The federal government needs to reconsider its proposed removal of commissions for risk insurance, particularly when global calamities and Australia's own underinsurance concerns are weighing heavily on the minds of advisers and clients.
Association of Financial Advisers (AFA) chief executive Richard Klipin said the planned abolition of commissions under the Labor government's Future of Financial Advice (FOFA) reforms needed to remain open for discussion.
"We've maintained from the outset that the remuneration structure in insurance is appropriate," Klipin said.
"It works in the interest of consumers, it works in the interest of advisers, it works in the interest of the community.
"If we ever needed any more evidence, the last four months of global calamities, from tsunamis to earthquakes to radiation leaks, floods, fires and so on, puts risk and risk management at the heart of the financial plans of millions of Australians and in fact national economies."
He also stressed Australia's underinsurance issue was exacerbating the problem and without a "tenable option", the banning of commissions was a move the AFA would caution Labor against taking.
Klipin said he expected the government would deliver an indication on its next move in the coming few months.
However, he said another concern for the industry was not only the outcome of the FOFA reforms, but the long-term issues it could bring.
"The final piece of this puzzle is that long after FOFA comes into law, when the current people in power have moved onto other roles, other careers, the people who remain in financial advice are advisers and their clients," he said.
"We need to heed the lessons from FSR (financial services reform) so that we don't repeat the mistakes."
