Any investigation into inappropriate insurance advice is likely to be complicated because it rarely generates direct consumer complaints, the Financial Planning Association (FPA) has warned.
Speaking about the current Australian Securities and Investments Commission (ASIC) review into life insurance advice, the FPA’s General Manager Policy and Standards, Dante De Gori, said due to the nature of the problem being investigated it was unlikely the industry would see any firm action from ASIC before the second half of 2014.
He explained that because consumers rarely complained directly to regulators like the Financial Ombudsman Service (FOS) or ASIC about being switched from one insurer to another, a deeper investigation into advice files was required to uncover examples of inappropriate insurance advice.
“In our experience, the complaints we get against FPA members – which are generally ones which also go to FOS – are because the consumer has suffered some type of loss, or received very poor service. We don’t generally get any direct complaints because an adviser has replaced insurance business, and I daresay FOS is the same,” Mr De Gori said.
“However, when we have reviewed cases where there has been a complaint due to some loss, and we’ve looked closely at those pieces of advice, then it (inappropriate advice) is noticeable with respect to the insurance aspect of the advice.
We definitely do see evidence of inappropriate advice in relation to insurance
“We definitely do see evidence of inappropriate advice in relation to insurance, as a subsequent result of the overall advice, but we do not get direct consumer complaints with respect to purely insurance replacement advice.”
Mr De Gori said that if an insurer approached the FPA about one of their members who was found to be churning, the Association would follow due process and take action if required.
“We would have to substantiate that the individual has breached the FPA’s code of conduct with respect to the way they delivered that piece of advice. If that was the case then yes, action would be taken,” he said.
When asked whether ASIC had approached the FPA in relation to its churning investigation, Mr De Gori said he understood the regulator was currently working through the data it had received from life insurance companies.
“ASIC are reviewing the data around that, but they’re also reviewing the advice given by those who have ‘replaced’ business. We believe they’re in the second phase of the project,” he said.
The ASIC is in breach of the National privacy principals just seeking the information and so are the insurance companies giving it.
The ASIC has also made rules and regulation that are not lawful.
As for the FPA it has enough members so does ANZIIF for that matter to get the monkey of our back an online petition is all that is needed.
Turning butter is not an offence and insurance companies do regulate such a practice.
NRAS has caused now for real estate agents to form seminars and hold high pressure selling events I’m Melbourne.
They will fly you fir free I have not seen a financial adviser do that.
FOS are now taking 2 years to make a decision that’s more important to fix Mr Kell FOS are making bad decision now the subject of many complaints to ministers well done Allison Maynard
We have much more pressing issue like the current laws we have to uphold, such as insurance companies who are trading insolvent.
Banks who have added fees we all know nothing about
Banks breaching contracts and putting people into financial trouble.
The ATO charging a credit card fee and making a profit from it.
Banks third line forcing still real estate agents and accountants selling insurance what is that no way do theses people have the knowledge
Agree all this information is to justify the beauracracy and the sold called executives who have never run a business to justify their handsome wages.Like BDMs they ask you how can I help with your business and I tell them give us some orphans/leads to service and they cringe.If this layer of disguised unemployment was not there as 80% of them are in that category then clients could pay lower fees.
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