Group life insurance sold through corporate superannuation funds may end up being treated as a retail product as a result of the Future of Financial Advice (FOFA) reforms.

Corporate Super Specialist Alliance (CSSA) President Douglas Latto told insuranceNEWS.com.au it is an alternative to allow an adviser to be paid for the supporting insurance services they provide.

“There are no upfront commission for life insurance in corporate super, but the FOFA bill plans to ban all payments,” he said.

“This is saying we can’t receive any money at all for providing life insurance to the members.”

Currently a super fund member pays a collective fee to cover the cost of a range of services and benefits including life insurance.

Mr Latto says while the Government and the Industry Super Network (ISN) want opt-in so people don’t have to pay for advice they don’t want, they are also campaigning for personal, individual financial advice, paid for through a collective fee.

“This is possibly the most patent demonstration of double standards we have seen to date in the FOFA debate,” he said.

“Personal financial advice is exactly that – highly personal. [And] why should all members of a super fund subsidise the personal financial plans of a few?”

Mr Latto says the collective fee at present enables an adviser to help a fund negotiate better features and lower premiums for members while also helping them with claims, not sort out an individual’s special policy.

“The Government, in its paternalistic fashion, has again decided what is good for you,” he said. “In their view, one size fits all.”