Advisers largely not prepared for LIF changes

New research from Zurich found that the majority of advisers do not understand how the new Life Insurance Framework (LIF) laws are going to affect their cash flow structures and remuneration.

Lewers Research conducted a study of 200 advisers for Zurich Financial Services, discovering that just under 65 per cent of advisers were not sure which types of life insurance remuneration were to be capped, while 69 per cent were uncertain of grandfathering rules.

In the study, only 40 per cent of advisers were found to have modelled the impact the LIF changes are going to have on their cash flow.

Kristine Brooks, the chief distribution officer at Zurich Life and Investment, said the lack of preparedness was a concern, as the reforms are to be implemented from 1 January 2018.

Brooks said, ‘The industry has had a long time to prepare for these changes, and while they ultimately became law in February this year, the detail behind the changes has been known for much longer.’

Zurich has announced it will release a suite of resources designed to prepare advisers for the changes, which will include a cash-flow calculator, podcasts, interactive surveys and webinars.

AMP has also announced that it will launch a hub aimed at preparing advisers for LIF changes, featuring similar tools.