ASIC Bans Risk Adviser Based on Lapse Data Research

A West Australian adviser has become the first person to be banned from providing advice as a result of ASIC Life Insurance Lapse Data Project (LILD Project) after receiving a five year ban for failing to act in the best interests of clients when providing life insurance advice.

The regulator banned Perth-based Philip Leake after it examined a number of his client files from Wealthsure Financial Services, where he was an authorised representative from March 2015 until January 2018.

ASIC found that Leake had not considered the circumstances of his clients and what life insurance they may need, nor their ability to pay for the cover recommended, and stated he had failed to make a reasonable assessment of which life insurance products might be best suited to his clients’ needs.

It was also found that Leake made false and misleading statements in his SoA by claiming to have considered his clients’ circumstances in relation to the waiting periods for income protection policies, when he had not actually done so.

The ban is the second enforcement action stemming from ASIC’s LILD Project, which was established in August 2016, and uses reports from life insurers that list advisers who have met specific thresholds relating to lapsed policies, allowing ASIC to target its surveillance activity and review the quality of advice.

In January 2018, ASIC named the first adviser to face enforcement under LILD Project with former authorised representative of GuardianFP, Duane Wright becoming subject to an enforceable undertaking requiring further training and licencee supervision on any advice provided (see: ASIC Takes First Action Against Adviser Based on Lapse Data).