- No (67%)
- Yes (28%)
- Not sure (4%)
Our latest poll seeks your view on the recommendation this week by the Parliamentary Joint Committee into Life Insurance that ASIC should be required to conduct random audits of 20 per cent of life insurance advisers over a three year period.
As part of its recommendations, the PJC also called for ASIC to publish any findings of adviser misconduct on its Financial Advice Registers and to force advisers to publish any reviews they receive on their own websites (see: PJC Recommends Compliance Audits…).
On the surface, this may appear to be a loaded question to ask risk-focussed advisers, given the nature of the seemingly endless regulatory spotlight that has been shone on their business processes and activities in recent years. Few, if any, sectors (with the possible exception of the banking sector) have had greater scrutiny applied to it in recent times, mostly by way of consumer-driven focus and Governmental oversight.
We’d predict the vast majority of risk-focussed advisers would be found by an ASIC audit to be observing all appropriate regulatory processes and, importantly, all ethical advice principles. The issue for this majority would simply become the administrative drain and potentially time-consuming task of participating in this process.
If the ultimate aim of these recommendations, made by those who seek to represent the interests of the Australian public, is to better serve their best interests, it would appear disingenuous to disagree with the principle. But the thread of this conversation is now in your hands.
How do you feel, given the previously-mentioned regulatory spotlight that continues to be shone on the life insurance advice sector, about the prospect of a random ASIC audit on your risk-focussed advice business?
Tell us what you think and we’ll report back next week…
As the last few years has proved to be a tainted process from day one, where a select group of known churners who make up a tiny percentage of advisers in Australia, were targeted and then surprise, surprise, the report was not favorable and all advisers were tainted, with insufficient support from the AFA and FPA, who were too timid and naive in their consultations with the Government and the regulators.
Government and Regulators knew very little of the Life Industry and it was up to the AFA and the FPA to educate and take issue with ALL recommendations that were not relevant, or were biased, or were blatantly skewed to favor the likes of the FSC lobbying, that had and still has their own agenda as priority number one, which is to protect their masters.
What has occured and what has passed as regulation, does not correlate with the Best Interest of all Australians, it provides the best interest for Life Insurance Companies to screw the advisers, with little regulatory recourse to force them to do the right thing.
I just wonder if they look at the BID advice requirements and actually understand how this might relate to advisers providing advice to clients? ASIC can come and audit me at anytime – I am professional and have excellent files and have nothing to hide. I pride myself on providing great advice to clients.
Our industry (unfortunately) has been hijacked by left wing activists who do not understand what we do and how it is done. They simply look at commission payments and just assume that we are doing the wrong thing. Do they see the time involved, the costs associated, the compliance requirements and the emotional support we provide to clients at time of claim. Do the see the cases where we do not get paid as u/w has declined an application.
It is just too easy to allow them to take pot shots. Our industry needs strong leadership to defend the role of financial planners and risk insurance advisers.
What really gets me though, is how industry funds and tv insurance offers seem to slide under the radar. Where is the focus on the poor definitions within industry super funds. Why doesn’t Aust Super advertise their income protection definition of total disablement?
Do these Politicians really believe that clients going to a comparison service will mean that they get a better outcome? Will they get good advice on how to structure their cover to get the best outcome for their needs.
Finally, in regard to LIF.. isn’t it amazing that as commissions have been reduced within the industry that most life insurance companies increased their premiums? It is also interesting that many of these companies are now trying to sell their insurance businesses. It is really is a pathetic state of affairs..
Riskinfo would no doubt have the correct statistics readily to hand however I recall reading an article not long ago which indicated risk advice represented a significantly minor percentage of complaints to the financial services ombudsman and those complaints involving an adviser were even less. That being so, why on earth would ASIC waste money conducting audits of such advisers who are being audited by their own licensees anyway. If ASIC are doing their job in overseeing licensees and ensuring their standards and obligations are being met isn’t that sufficient? What have I missed? Riskinfo, do you have any of the members of the PJC on your subscription list?
Here’s a comment…instead of ASIC randomly reviewing files where they really don’t know what they are reviewing anyway…how about we advisers put some pressure on the Life Companies in an effort to expose adviser who are still churning. For example, just a few days ago I had a long-term client get hood-winked by their new accountant who referred them to the Accountant’s referral source…(most likely a spotters fee involved). The new adviser has told the clients that they will not lose any benefits and will be in the exact same place as they were with my advice…however, this new adviser has not conducted any product research on any on the client’s policies and if they had of cared and acted in the best interest of the client, the new adviser would have discovered that one of the client’s policies is a Level Premium Policy that has been active since early 2013…Surely the industry can be forced to expose these types of advisers and their apparent unethical behaviour???
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