Statements of Advice (SoA) produced by financial advisers for life insurance clients will come under close scrutiny with the Australian Securities and Investments Commission flagging a review of the documents in 2016.
ASIC, Executive Leader, Louise Macaulay said the regulator had been asked by the Assistant Treasurer, Kelly O’Dwyer, to examine SoAs around life insurance to ensure they were suitable for clients and being used correctly by advisers.
“We have been asked in the second half of next year to do a review of SoAs in relation to life insurance. The Assistant Treasurer asked us to look at a simpler and more effective disclosure for consumers and also in assisting advisers to make better use of these documents,” Macaulay said, addressing delegates at the 2015 FPA Congress.
“We have been asked in the second half of next year to do a review of SoAs in relation to life insurance.”
Macaulay said ASIC would be closely involved in the development and rollout of the Life Insurance Framework having being asked to consult on the draft legislation when it is released before Christmas and to review the life insurance sector in the next few years.
“ASIC will be involved in the consultation because part of the implementation process will be ASIC making an instrument that will complement the legislation,” Macaulay said.
“We are going to do a review of the impact of the reforms by the end of 2018. This will be a follow on from the work we did in Report 413, which initiated the discussion with government and industry about the changes that have led us to where we are today.”
“We will also be alert to any issues around advice given between now and when the transition period starts next year.”
Referring to the Financial Adviser Register launched in March this year Macaulay said the register provided “visibility across the industry in relation to individual advisers and where they sat” and there was room for the inclusion of further data on advisers.
Professional standards and the inclusion of business addresses for advisers were two possible areas of extra information according to Macaulay who thanked licensees for providing the data of the 22,000 advisers listed on the register.
