ASIC Takes First Action Against Adviser Based on Lapse Data

ASIC has accepted an enforceable undertaking (EU) from the first adviser picked up under its Life Insurance Lapse Data Project, after finding he failed to meet his obligations in providing life insurance replacement advice.

The regulator accepted the EU from Gold-Coast based adviser, Duane Wright, and his business First National Home Loans And Insurance, after it found he had:

  • Failed to undertake adequate inquiries into the relevant personal circumstances of some clients to whom he made recommendations to switch life insurance policies
  • Failed to provide adequate replacement product advice in the Statement of Advice, preventing the client from making an informed decision to switch life insurance and superannuation products
  • Advised purchasing life insurance that was too expensive for the client
  • Failed to consider the longer-term impact on retirement savings of placing life insurances within superannuation, and
  • Failed to provide accurate information about the clients’ circumstances within the Statement of Advice.

ASIC stated its surveillance of Wright examined a number of his client files while he was an authorised representative of Guardian FP from July 2012 to April 2016. Wright is currently an authorised representative of Alliance Wealth, which is a wholly owned subsidiary of Centrepoint Alliance.

Under the terms of the EU, Wright and First National will undertake further training on the provision of financial product advice and will be subject to strict supervision requirements for 12 months, including having all advice audited by their licensee before it is provided to clients.

Wright is the first adviser to be subject to action stemming from ASIC’s LILD Project which was began in August 2016 and uses reports from life insurers that list advisers who have passed thresholds relating to lapsed policies.

ASIC stated these reports, in conjunction with other data, enable it to target its surveillance activities and review the quality of advice provided by advisers on the lists to determine whether they are acting in their clients’ best interests.

  • Md’a

    ASIC claims that it is this kind of behaviour which has directly lead to the LIF changes causing a total upheaval in the life risk industry and they accept an EU a punishment. An enquiry into ASIC immediately to find out what their agenda is and who is behind it. A government instrumentality out of control that needs to be brought under control.

  • emkay

    does ASIC actually define a “lapse”? Does it include death, TPD, loss of employment etc etc Or is every lapse just due to “greedy” advisers?
    Looks like the controlling communist state is well and truly alive!