The Australian Securities and Investments Commission (ASIC) has flagged its intention to conduct a surveillance of life/risk advice as part of its broader work on the Life Insurance Framework review.
ASIC commissioner, Danielle Press flagged the surveillance in an address to the National Insurance Brokers Association today noting that ASIC would be looking at “representative and random samples of life insurance advice”.
Press told the forum that since January, last year, ASIC had been collecting aggregate level data from life insurers every six months to assist with its 2021 LIF review.
“We are currently analysing the data collected to date, though it is still too early to comment on any real trends that may be attributed to the reforms,” she said. “In undertaking the review we will consider the factors identified by the Royal Commission and, if we think the reforms have not been effective, we will consider recommending to the Government that the cap on commissions be reduced further.”
Comments
Im holding back from calling them idiots, but I dont know why I should hold back. the strain the RC and many industries have put on people have caused a dramatic trend in insurance claims and premiums have followed up plus there may well be more older insured people who have found stress in paying these premium increases. So many people would be now reducing their cover and these figures will distort their information and so cutting advisers commissions why?
Because of blatant churning
How does the Ethical approach to problem solving go again?
Oh Yes.
Step1. Work out what the answer needs to be ( Consult banks and Industry super first)
Step2. Collect files selectively that provide the result
Step3 Have a quick media blitz on how bad the results are and how we need to fix this and customers will be better off
Step 4 Get changes through Parliament before anyone notices
It's worked every other time
You forgot step 5 - request more $$$$$$$$$$$$$$$$$$ to pay ASIC staff to study and inform themselves on what they do not know - which is lawyer talk for lawyers tring to understand anything. ASIC I believe IS ALL ABOUT THE MONEY - FOR ASIC. The RC demonstrated that ASIC is VERY INEFFECTIVE - and they now receive more $$$$$$. Follow the $$$$$$ and self interest and you might find and ASIC COMMISSIONER.
Is now a good time to start self-medicating? Honestly, that dark cloud has got blacker
So without any hesitation at all Danielle Press reverts immediately to a threat of further reductions in commission as the integral reason why advice will be deemed either appropriate or otherwise.
This is a disgrace.
This is simply a case of ASIC pushing to achieve their original intention of forcing either level commission or nil commission remuneration for Risk Insurance advice on which they failed to achieve through the LIF process and off the back of their conflicted ASIC 413 Report.
On the back of the incredibly damaging impact to clients and the industry from the banning of grandfathered commissions, ASIC immediately then deliver another major threat to the viability of any small to medium Risk Advice practice.
The intention to destroy this industry and remove as many experienced, ethical and quality advisers from practicing is unheard of.
ASIC have created a position of gross bias in regard to their approach.
They have created a position of complete lack of trust in their process and a general opinion they will create the data necessary to support their recommendations.
They are methodically destroying an industry that does not deserve the relentless, persistent and unfair scrutiny.
This is now clearly grossly discriminatory.
We now have Danielle Press at ASIC and a Board Member of Robo advice business, Six Park.
This is a quote directly from the Six Park CEO in July, 2018 after Danielle Press was appointed.
" Danielle has a very nuanced understanding of how robo-advice complements the wealth management landscape in Australia".....
" Danielle said she was excited about joining Six Park and sees huge potential in robo-advice as part of Australia's wealth management landscape, particularly in the climate created by the Banking Royal Commission"
" Robo-advice REMOVES THE CONFLICT THAT EXISTS in many forms of financial advice" , she said.
" Six Park is LEADING THE WAY in giving Australian investors a trustworthy , professional alternative to that conflicted model, which is coming under increased pressure."
So, we have an ASIC Commissioner who has publicly stated that the type of advice she wholly supports and the type of advice provided by an organisation she is a board member of removes the conflicts that exist.
How on earth can this be acceptable and not treated as a biased position and how on earth is this not considered to be conflicted.?
How can an ASIC Commissioner be passing judgment when their other role is to enhance the business of a competitor financial services model ?
Is Josh Frydenberg ok with this?
What type of country are we now living in ?
While I agree with 90% of your sentiments, I say show me a real client harmed by removing grandfathered comms (and I say refer them to another adviser if you do find one) and 2. Good quality advisers will find no problem continuing BAU. Many clients of quality of advises, when called up as part of deloitttes insurance remediation projects said ‘ leave my adviser alone he only gave me great advice’.
so she'll cause as much damage as possible at ASIC then parachute to 6 Park? Yes, a conflict indeed, amazing that a Liberal government allows it.
I think you should contact media ABC etc
I think they will have a field day and bring ASIC to account
It is the only way
Maybe this could be a positive. Asic relied on churners as reported by the fsc to try to prove the last review, now that most of those companies that operated on the edges of advice and contributed to that are gone, they may get an accurate picture
Bring it on I say. Nothing to hide here.
You have summarised that perfectly.
I think it is great ASIC will see if everything is working to see if financial planners will work in their clients best interest. By the other comments I ask you the question what do you have to hide? If you are doing the right thing there is nothing to worry about. Could the comments by amon and ten be a reflection that nothing has changed in financial planning industry and you only work in your own interest
No, it is a reflection to say that ASIC has previously used skewed data to press an agenda. Advisers generally have nothing to worry about except that.
I fully retract my comments.
I realise they were submitted without thought or consideration.
There are some great comments on this thread and clearly we see ASIC having their own conflict of interest. i thank you for retracting your judgement on me. I have exceeded 3 decades of work as a planner in a small country town and simply grown because of my own service and no complaints and no businesses were bought. i would think that i demonstrates I have done the right thing by my clients over those decades. I feel now that the industry is moving into unethical times. Unethical because it challenges my principles and that of helping those in need and not those who can just afford the much higher fees that would have to be charged. I have always said if I have to consider what im getting from a client to assist them then this role is not for me, and now one would be first working out if the client can afford me. Thats a sick industry. Commissions and trail helped and worked. It allowed us to serve those in genuine need and maybe not able to pay. There is cross subsidies across most industries and thats actually how insurance works, both life and general insurance. A cross subsidy by way of a premium payment for the protection. Now its up to gofundme for these people and the average result is about $4,000 for a cancer or death. sad it is, that most Australians will now no longer afford advice or find a adviser able to do it.
As I said above, Ive based my own career on ethics and now faced or challenged to move into a unethical future where the real needy will be the losers, it breaks my heart and its broken me far worse than you could imagine.
We are currently analysing the data collected to date, though it is still too early to comment on any real trends, we dont like what we see” she said. “In undertaking the review we will consider the factors identified by the Royal Commission and, we think the reforms have not been effective. We will recommend to the Government that the cap on commissions be reduced further.” - There, fixed it.
How about focusing an article on AFCA. This new organisation is hell bent of destroying every advisers name that comes across their desk, with skant consideration of procedural fairness
What's ridiculous is that they're starting to investigate whether the LIF reforms have worked halfway through the implementation of the reforms!! Surely the impact of the reforms can only be known once Advisers have been operating on the final 66/22 commission model for a period of time. What data are they collecting to use as the basis for this review anyway....lapse data? Lapse figures are an absolute joke, if you retire and cancel your policies, that's a lapse, if you die and the life cover is paid out, that's a lapse, if you cancel and replace a policy with the same insurer, that's a lapse.
The future of our businesses is seriously going to be decided by this type of data analysis. What a joke.
Meanwhile Mortgage Brokers who do some initial work to get a loan set up and then sit on a trail for the life of the loan, without the requirement to provide any ongoing service at all, just carry on without change.
If our industry associations can't win this battle to retain at least the 66/22 commission structure then they should voluntarily wind themselves up and admit they're a waste of space.
The great concern in relation to this is the lapse data,the manner in which it is recorded and the interpretation of that data by ASIC.
ASIC's focus has been in relation to the replacement of policies for the purpose of remuneration generation.
As advisers are obligated to the BID, it is sometimes necessary to provide a better strategy or product suitable to the clients needs and as client needs change.
It is simply unacceptable that a policy that may have been in place for 10 years and then is cancelled by the client (not recommended to be cancelled by the adviser) is then recorded as a lapse against the adviser's name and then potentially used against that adviser as someone who has cancelled policies without any assessment of how and why the policy was cancelled or replaced.
At present, every risk adviser will know that client's are screaming out weekly in relation to excessive and annual premium increases beyond their affordability.
Clients are either threatening to cancel their existing insurance cover or asking their adviser to consider alternatives which may or may not require a compromise in the level or type of cover, but will reduce their financial commitment.
If a client instructs the adviser to assess and recommend alternatives with a primary objective of retaining cover at a more affordable level, this potentially could be used against the adviser as an existing policy may be cancelled and therefore may be labelled as a lapse even after many years in force.
This is not right on any level.
The data that ASIC should be only assessing is policies that have only been in force for up to 2 years and have been replaced, however, the insurance companies should also be doing so much more to determine why a policy has been replaced, rather than simply recording it as a lapse.
It seems the Life Insurance companies have not done one thing since the ASIC 413 Report or the commencement of LIF to closely assess the reason for policy cancellation and to implement systems that do not implicate advisers through a single determination of a policy cancellation.
how can an ASIC executive be a director of any commercial entity? Its just an inherent conflict of the highest order. But don't expect a govt of any hue to care a damn about it when there is a bipartisan agreement to smash the advice sector.
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