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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Here is the insider scoop on ASIC. Duane Wright was previously AAA Financial which ASIC closed down. When Guardian took on a number of the AAA advisers, ASIC were quite rightly concerned and started monitoring them.
This is were it gets interesting. Report 413 came about from targeting those individuals ASIC already knew to be a problem which was in effect an exercise for ASIC to get additional funding. Hence why only 200 files of targeting individuals would give ASIC the report they required for this extra funding. Hence why ASIC refuse to release the details of how the findings of 413 were reached and how the "surveillance" was undertaken.
The result as we all know was that the FSC jumped on this knowing that the report and churn numbers were not a real reflection of the industry and went about falsely creating the LIF . As we know ASIC admitted that churn is in fact not an industry issue after the same FSC members passed over the correct data after the LIF was passed.
And here we see the result. A handful of adviser with action taken over churn compared to the 99% who are doing the right thing for customers.
Clients now being forced to pay fees for risk advice, good advisers being forced to leave the industry and an increase in junk direct insurance with lower claims paid is the result of ASIC and the FSC's malpractice.
Let us hope to see some investigation of this in the Royal Commission.

Thats pretty explosive stuff Anon! Lets hope light gets shined further on these inner workings.

If this is the case Anon, and I don't doubt you, then this publication should be running consecutive headline articles to get it well and truly in the spotlight. If a bit of investigative reporting can bring down a US president in Watergate, certain that the right articles and questions can bring to an end the clear bureaucratic conspiracy occurring in ASIC for their own benefit of more power and funding.

So they are calling it "lapse data" based now, not churn? Is churn a dirty word at asic now? Not providing a RPAR surely that would be picked up in audit if it was systematic. Ps who gives asic the right to decide if the insurance is too expensive? Not too expensive if its claimed on is it?

So a known offender was "monitored" by ASIC and continued to offend. The experts must be surprised the changes to the insurance laws did not stop this. So lets make everyone get 5 more degrees. Surely each degree will stop someone from doing this stuff and 5 degrees is extra security. NOT..... Personally it seems that all the changes are failing to stop people doing the wrong thing, and the regulator needs to consider a different approach.

Let's hope some of this comes out in the Royal Commission, the collusion, the use of false data to set policy for commercial gain

Lapse data provided by the Insurers is innaccurate and gives the wrong impression. A policy that has been paid out and “lapses” due to the death of the client is not an adviser caused lapse yet is recorded as such and reported with the rest of the data.

The same issue applies if the policy is cancelled and renewed to either update the sum insured or change the ownership to a super fund or different superfund, how is this a lapse yet it forms part of the dishonest figures ASIC and the FSC rely on.

So if ASIC can identify so called "churners" through lapse data, then why do we have the new LIF rules? ASIC (Insurers and licensee) can easily identify an Adviser who meets the metrics for further investigation, rather than taking a sledge hammer to the industry with LIF! What a joke this industry is.

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