Life insurers have hailed the next phase of advice reforms as a “big win” for Australians, but financial advisers are more cautious, saying they want further detail on how the changes will be implemented.

Assistant Treasurer Stephen Jones said last week the federal government is developing draft legislation for a new advice model and other measures to improve advice access and affordability.

Under the model, life and general insurers can provide “safe and simple” advice to customers upon request. Current laws only allow them to give general advice that does not consider personal circumstances.

The Council of Australian Life Insurers says the industry has been in “close collaboration” with the government over the past 18 months to address advice challenges facing consumers.

“This is a big win for all Australians who want to secure their financial future,” CEO Christine Cupitt said. “This had to happen. We can’t continue to have almost 3.5 million people in this country who are underinsured and unprotected when times get tough.”

Financial Advice Association Australia says Mr Jones has now provided more detail and it welcomes the plan to let members employ the new class of advisers.

“We certainly believe that advice firms should have this option,” association CEO Sarah Abood said.

“This provides a more level playing field, enhances competition and gives consumers more choice in how they access simple advice. We think these reforms will go some way to getting more financial advice to more people.

“We are looking forward to seeing further detail on how these reforms will work … Implemented correctly, these reforms have the potential to … increase access to high-quality and more affordable financial advice for more Australians.”