A dealer group has called for a separate licensing regime for advisers selling life insurance.

Synchron director Don Trapnell says life insurance advisers should be separated from intermediaries giving advice in investments or general insurance.

“I believe there is a lot to be said for removing life insurance from financial planning,” he told insuranceNEWS.com.au.

“There is more in common between life and general insurance, because both do not talk about investments.”

Mr Trapnell says a three-tier licensing system should be instituted with separate licences for life insurance, investment advice and general insurance.

“Advisers could hold one licence or all three if they have the necessary training and skills,” he said. “This would remove the ridiculous situation where the Government is producing the same legislation covering different parts of the industry.”

Mr Trapnell says the Government has banned commissions on life insurance sold through superannuation because of problems with companies such as Storm Financial and Westpoint.

“None of these companies sold life insurance, and in fact Storm didn’t rely on commissions – it had a fee-for-service model,” he said.

Life agents started advising on investment products in the mid-1980s, and life insurance companies saw it as a way of generating new income streams.

But Mr Trapnell argues the two advice streams never had anything in common.

“Life insurance sales are made at an emotional level that is backed up with logic,” he said. “Financial planning is not sold on emotions and very few financial planners can do both.”