Life insurers have pressed the federal government to push ahead with plans to introduce a simple advice model after a media report today said the reform was at an impasse.

The Australian Financial Review report, citing unnamed sources, said the financial services industry is split over how the new advice offering should be paid for.

Life insurers back the simple advice proposal and have said the service will not come at additional cost to consumers.

“Without these reforms, millions of Australians and their families will be left behind in financial limbo,” Council of Australian Life Insurers CEO Christine Cupitt told insuranceNEWS.com.au.

“Doing nothing won’t just hurt today. It’ll set in motion a chain reaction over the next 10, 20 and even 30 years as many Australians remain priced out of getting the right advice to secure their financial future and look after their loved ones.

“We have an advice accessibility crisis in this country. It’s leaving too many people underinsured and unprotected because they can’t afford to get the right advice about the best cover for them.”

She says life insurers “just want to be able to provide simple advice on their own products when people ask them to, at no extra cost to the customer”.

insuranceNEWS.com.au has asked the Insurance Council of Australia for comment.

ICA backed the government’s simple advice plan when it was announced towards the end of last year.

General and life insurers are only allowed to provide general advice under current laws.

The AFR report said Financial Services Minister Stephen Jones is expected to release a draft bill for the next stage of advice reforms in coming weeks.

The reforms include the proposed simple advice model, which Mr Jones has said will increase access to and affordability of financial advice.

The draft bill is likely to provide more detail on what simple advice means. So far, the government has said only that a new class of adviser will be trained to provide simple advice. They will generally be employees of insurers and other financial services institutions, and they cannot charge fees or commission.

Financial Advice Association Australia says it supports the simple advice concept.

“However, we think it needs some guardrails in order to deliver on the policy intent of getting more high-quality advice to more consumers,” CEO Sarah Abood told insuranceNEWS.com.au.

One such guardrail relates to the meaning of simple advice, so consumers are aware of what they are getting.

“We need a name that clearly signals to consumers what they can expect from the new class of advice,” Ms Abood said.

“We think the name shouldn’t include the term ‘adviser’ or ‘planner’ ... these are currently restricted under law to those who meet very stringent professional education and experience requirements.”