![\"AFA](\"https:\/\/riskinfo.com.au\/news\/files\/2015\/03\/Brad-Fox-2.jpg\")
<\/a>The Association of Financial Advisers (AFA) CEO issued a call to action to all licensees to make their own moves to address the concerns raised by the regulator in its recent review of life insurance advice.<\/p>\n
\u201cThe Australian Securities and Investments Commission (ASIC) Report [on retail life insurance advice] was about advice quality,\u201d Mr Fox told riskinfo. \u201cAdviser remuneration is the most emotive issue to come out of that report, but it\u2019s not the most significant part of the solution. What\u2019s key is that advisers are delivering high quality life insurance advice that is well documented and appropriate for the client.\u201d<\/p>\n
He said while the AFA was continuing talks with other industry stakeholders to try and achieve a unified position on the future of the life insurance sector, there exists a clear opportunity for licensees to take a leadership position by adopting new remuneration standards and advice quality controls.<\/p>\n
\u201cIn recent months we have seen excellent examples of licensees stepping up to take leadership positions on issues like adviser education standards and professional association membership,\u201d Mr Fox said.<\/p>\n
…some licensees will seize on the opportunity to address consumer perceptions by mandating that their advisers accept no more than a hybrid payment<\/h6>\n
\u201cI would not be surprised at all if we see announcements from licensees mandating new standards ahead of an industry wide solution being agreed. I think it is totally conceivable that some licensees will seize on the opportunity to address consumer perceptions by mandating that their advisers accept no more than a hybrid payment. This would certainly have the AFA\u2019s support.\u201d<\/p>\n
Mr Fox said licensees were central to addressing the quality advice concerns raised by ASIC in its report.<\/p>\n
\u201cLicensees will no doubt be taking a more proactive supervision role with respect to replacement product advice and there are simple yet effective ways for insurers to support licensees to do this. Insurer reporting to licensees can identify unusually high levels of replacement insurance advice, and licensees can also identify advisers showing a surprisingly high preference for using a particular insurer.<\/p>\n
\u201cOur members are governed by a code of conduct, which states that their remuneration must represent fair value for their clients, and that they must prioritise the interests of their client above their own. If an adviser was found to be churning \u2013 that is providing replacement policy advice which leaves the client worse off, for the purpose of earning commissions \u2013 then that would be a violation of the code and the member would be subject to disciplinary action.<\/p>\n
\u201cIn the last five years we\u2019ve had no complaints about an adviser in relation to their insurance behaviour. But if this was occurring, we want licensees to know that they can, and should, work with us to identify wrong-doers and to take the appropriate action.\u201d<\/p>\n
He also acknowledged that with the proposed reforms to advice education and professional standards, recommended by the Parliamentary Joint Committee on Corporations and Financial Services, licensees, regulators and professional associations would need to develop stronger working relationships.<\/p>\n
\u201cAs we go through the changes to lift professional standards, it\u2019s very clear that there will need to be more communication between the various bodies about advice failures. We don\u2019t yet know how that engagement will work in a process sense, but the bottom line is professional associations don\u2019t want members that are doing the wrong thing. In that regard, we are here to help licensees.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
It\u2019s time for licensees to step up and implement their own solutions to the issues surrounding quality insurance advice and adviser remuneration, Brad Fox has declared.<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[282,8,6,270],"tags":[],"class_list":{"0":"post-29504","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-associations","7":"category-compliance-regulation","8":"category-dealer-groups","9":"category-remuneration"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/29504","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=29504"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/29504\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=29504"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=29504"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=29504"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}