Insurance approved product lists (APLs) provide efficiencies to for financial advisers, according to the Financial Services Council (FSC).
The FSC’s director of policy and global markets, Allan Hansell has used testimony before a Parliamentary Committee to defend the role of APLs and the benefits they deliver to financial advisers.
Under questioning from West Australian Labor Senator, Matt Keogh Hansell said he believed there were efficiencies which could be gained by having an APL.
“If an adviser has to go through the process of assessing every product that's on the market each time someone presents to them, that comes with a cost,” he said. “The cost of financial advice is already making advice inaccessible to clients. We're trying to keep costs down.”
Keogh, sitting on the Parliamentary Joint Committee on Corporations and Financial Services inquiry into the Life insurance industry, asked whether what Hansell meant was that “so long as there is a product on the list that is in the ballpark of what is suitable to the client, you can offer that product. And it's only where there is no product on the APL that is in that ballpark—i.e. suitable, even if it's not the absolute best product—then that's fine?”
Hansell said that advisers had to document the fact that they'd gone through and considered the best interests of the client.
“It's really a matter for [the Australian Securities and Investments Commission] ASIC to determine whether that's taken place,” he said.
Hansell went on to say that the duty under the law was for the adviser to act in the best interests of the client.
“As I said, products will have very different features and costs associated with them, and there are lots of variables that need to be considered. So long as the adviser can demonstrate that they're acting in the best interests of the client in terms of the product that they select, then I think that would meet their obligations,” he said.