The Australian Securities and Investments Commission (ASIC) has signaled it will not be relenting on churn in the life/risk environment.
ASIC Commissioner Peter Kell told a Money Management/Financial Services Council (FSC) function that there remained too many bad practices with respect to churn and the activities of some advisers.
The Commissioner said ASIC had been supportive of the FSC's self-regulatory approach and indicated the regulator's disappointment with that approach having lapsed.
"If you don't think it's a problem, think again," he said.
Kell said ASIC had identified significant amounts of inappropriate advice including instances of life policies being replaced for no valid reason, policies being replaced with more expensive policies and instances of clients' personal circumstances not being taken into account.
He said the regulator had also identified instances of fraudulent statements.
Kell said for this reason the regulator would remain focused on the issue on the basis of commission-based incentives undermining the best interests of clients.
