ASIC lapse probe results in adviser EU
The Australian Securities and Investments Commission’s (ASIC’s) life insurance lapse data project resulted in a Queensland adviser entering into an enforceable undertaking (EU).
The regulator said that Queensland man, Duane Wright and his business, First National Home Loans and Insurance Pty Ltd, had entered into the EU on the basis that he had failed to meet his obligations in providing life insurance replacement advice.
ASIC said it had found that Wright had:
• failed to undertake adequate inquiries into the relevant personal circumstances of some clients to whom he made recommendations to switch life insurance policies
• failed to provide adequate replacement product advice in the Statement of Advice, preventing the client from making an informed decision to switch life insurance and superannuation products
• advised purchasing life insurance that was too expensive for the client
• failed to consider the longer-term impact on retirement savings of placing life insurances within superannuation, and
• failed to provide accurate information about the clients' circumstances within the Statement of Advice.
The regulator said that under the EU, Wright and First National had agreed to undergo additional training in relation to the provision of financial product advice and must adhere to strict supervision requirements for 12 months, with all their advice audited by the authorising licensee before it is provided to clients.
ASIC's surveillance of Wright looked at a number of his client files from GuardianFP Ltd, where he was an authorised representative from July 2012 to April 2016.
Wright is a current representative of Alliance Wealth Pty Ltd.
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