The loss of independent life advisers to help clients during claims will be devastating, and new legislation is to blame, according to MBS Insurance partner Trevor Shipton.

“Claims are a terrible process to have to go through at the worst time in our clients’ lives,” he says in a submission to the Parliamentary inquiry into the life industry.

“The reassurance, support and expertise of an adviser at claim time can make all the difference in making the process bearable.

“As advisers, we take part of the burden our clients are experiencing, to help our clients focus on recuperating or mourning the loss of a loved one.”

Mr Shipton says MBS has made $18.8 million of claims for clients and none have been refused.

“In our experience, the insurers we deal with have been honourable, and we could only complain about minor parts of the claims process,” he said. “We believe that claim time is the most important time for us to be available for our clients.”

Mr Shipton believes having an independent adviser involved in the claims process keeps insurers honest.

“I have seen the conflict involved in bank/insurer-owned advisers at claim time with their clients and have had to step in during such events to do pro-bono work just to force the insurer to come to a resolution. The power of independence should not be underestimated and definitely not ignored as it has been so far.”

Mr Shipton says the Life Insurance Framework will destroy the independent adviser, and he is calling for a reassessment of the legislation.

“An inquiry into the behaviour of all parties involved in the reforms needs to be completed because there are numerous indications that these parties have acted outside of their remit. In addition, a study into the impact of small business needs to be conducted.

“I believe the reforms in their current and planned states will destroy the only independence the industry has, which all happens to be small businesses.”