Inappropriate insurance advice was one of the key issues that led to the cancellation of AAA Financial Intelligence\u2019s AFSL earlier this year, the regulator has revealed.<\/p>\n
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Australian Securities and Investments Commission (ASIC) Deputy Chair, Peter Kell<\/strong>, said the regulator\u2019s surveillance of AAA Financial Intelligence and AAA Shares (AAA) uncovered repeated failures with respect to risk advice. These, along with several other issues, led to the cancellation of AAA\u2019s license in February 2013 (see: ASIC Calls AAA Compliance \u2018Appalling\u2019<\/a>).<\/p>\n Speaking at the Association of Financial Advisers’ National Conference, Mr Kell shared some of the poor examples of risk advice it found during its AAA investigation, saying these issues were also occurring in varying degrees repeatedly and commonly across other licensees.<\/p>\n \u201cWe reviewed more than 100 files,\u201d Mr Kell said of the AAA investigation. \u201cOver 80% of those included risk insurance advice. Out of those files that included risk insurance advice, just over 80% of those contained inappropriate advice.\u201d<\/p>\n According to Mr Kell, ASIC identified a number of issues in relation to\u00a0the\u00a0risk advice provided by AAA, including:<\/p>\n In addition, Mr Kell said the regulator found that the affordability of the cover was often not adequately considered prior to a recommendation being made.<\/p>\n \u201cWe had high levels of cover recommended to clients with no dependents and no liabilities. And on the other hand we had multiple cases where a superannuation rollover was the vehicle to write otherwise, frankly, unaffordable risk cover,\u201d he said.<\/p>\n \u201cIn summary, what we found was inappropriate, conflicted advice that caused real, meaningful harm to the consumer.\u201d<\/p>\n Mr Kell said the issues identified in the AAA investigation, along with similar problems found within other licensees, had led the regulator to undertake a major risk advice surveillance operation (see: ASIC Commences Churn Inquiry<\/a>).<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Inappropriate insurance advice was one of the key issues that led to the cancellation of AAA Financial Intelligence\u2019s AFSL earlier this year, the regulator has revealed.<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,6],"tags":[],"class_list":["post-23188","post","type-post","status-publish","format-standard","category-compliance-regulation","category-dealer-groups"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/23188","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=23188"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/23188\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=23188"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=23188"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=23188"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
… what we found was inappropriate, conflicted advice that caused real, meaningful harm to the consumer<\/h6>\n