The Australian Securities and Investments Commission (ASIC) needs to be careful to ensure that financial advisers are not inadvertently caught up in the new, tougher anti-hawking provisions around the sale of life insurance products, according to Association of Financial Advisers (AFA).
In a submission responding to ASIC’s tough new approach to unsolicited telephone sales of direct life insurance and consumer credit insurance, the AFA has backed the banning of unsolicited telephone sales of life insurance but has warned of the need to avoid unintended consequences.
The AFA said that life insurance was a complex product that should never be sold without the benefit of personal financial advice in circumstances where the average Australian was unlikely to have a good understanding of their insurance needs or the products available.
However, the AFA warned ASIC that the consumer protection messaging around life insurance needed to be carefully modulated to ensure that the value of life insurance was not undermined.
It also noted the anti-hawking provisions and warned against allowing financial advisers to get caught up in the definition of “unsolicited”.
“One important consideration for us is the definition of ‘unsolicited’ and the risk that a financial adviser contacting an existing client about the suitability of their current insurance could be considered unsolicited,” the AFA submission said.
“We also believe that extra consideration needs to be given to financial advisers who work with regional and remote clients, where interaction with their clients is more often done via the telephone,” it said. “We would not like to see this proposal place limitations or additional costs on these regional/remote financial advisers.”
“In addition, given the changes in communication technology, maybe there is a need to address other forms of contact that are possible through social media applications.”
Comments
when will all this madness end?
Probably never at this rate Peter W.
The most ridiculous nature of this matter is that as advisers we are bound by the Best Interest Duty and our clients would rightly expect us to be looking after their interests.
We are defined as being the expert in our field by our clients and as such, we have a duty of care to contact our clients with whom a relationship already exists to inform them of any concerns or consequences in relation to their existing insurance.
More often than not recently many advisers are receiving contacts from clients complaining of excessive premium increases and requesting alternative options to be considered.
So, the client can contact the adviser requesting alternatives be considered but if an adviser pro-actively contacts their own client to alert them to a forthcoming 20-30% premium increase and a review and this is an unsolicited contact, there may be a risk that the adviser may be caught up in the anti hawking issues ???????
But if we do not pro-actively contact our client, are we then negligent in our duty of care and considered to NOT be acting in our clients best interest ?
You are right Peter....this is utter madness.
The over reach of legislation has got to a point where it is self imploding because the people who create it and enforce it do not understand and do not project far enough ahead to assess the unintended consequences.
There should be no direct insurance business at all.
All Life Insurance business should only be able to be implemented via an Authorised Representative and based on personal advice only.
The commodification of Life Insurance has devalued the very valuable work quality advisers perform and deliver.
Junk Insurance is like junk food......tastes great at the start, appears to be relatively cheap and is a short term fix to a long term problem.
Have too much of it and it will make you feel sick and in the end, be detrimental to your well being.
It's a throw away product based on and marketed on an emotive, knee jerk purchasing decision.
Over regulation is strangulation and is counter productive to quality advisers being able to do their work in a professional manner and in the best interest of their clients.
we seriously have to stop jumping at shadows? But I understand why we are.
I had Medibank call me up the other week and try to sell me life insurance. I'm not sure when these anti-hawking provisions are meant to kick in, but they haven't yet.
No worries. A robo-adviser can make a robo-call, because they aren't a person...lol
Very slowly the general public are starting to become aware that a lot of the recommendations from the Haynes Commission are verging on the insane, and for the Govt to simply roll over on them all will prove to be a big mistake. It also assume the advisers are just going to sit here & take it. Let me assure you, we won't.
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