Advisers worried about Choosi

27 February 2013

A group of financial advisers has raised concerns that the life insurance comparison website is misrepresenting its services to retail clients.

Aaron Zelman, founder of LifeScope Advice and a member of a LinkedIn group called Australian Risk Advisers, started a discussion thread about Choosi earlier this year, claiming he could only receive life insurance quotes from a limited number of brands despite the website stating otherwise.

Choosi's homepage features logos of AMP, CommInsure, Asteron, Zurich, AIA and BT among others - under the banner which reads "our range of direct and adviser distributed insurance brands".

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However, the website's Financial Services Guide states that "the products that can be arranged directly through us are limited to the following brands: Australian Seniors Insurance Agency; Aussie Insurance; Budget Direct Insurance; Guardian Insurance; Prime Insurance; RSPCA Insurance; and Real Insurance."

All of these brands (four of which provide life insurance) are owned by Hollard Financial Services — a company which also owns Choosi.


"My primary concern is that it's misleading consumers," Zelman told Money Management. "If they're trying to provide choice, then selling one insurer's products with four different brands is not, in my opinion, choice," he said.

In December 2012, the Australian Securities and Investments Commission (ASIC) warned insurance comparison websites about the need to provide accurate information.

"Some of the websites only compare a limited number of brands/products from a limited number of providers," ASIC stated. "This may not be clearly disclosed, which creates the impression that the extent of comparison is much broader than it actually is."

The regulator also noted there was insufficient disclosure regarding relationships between website operators and the issuers of the insurance brands being compared.

Upon a customer's request, the Choosi staff would refer them to a "qualified adviser", the FSG states. But despite the disclosure in the FSG, the site seems to have marketed itself as providing quotes for all brands listed on the homepage, Zelman said.

Managing director of TAL Ltd, Jim Minto, said the company requested its logo be taken off about eight months ago.

"We weren't satisfied that people were given a proper comparison and we asked to be removed," Minto said.

"As the market becomes more digital, it's vital for everyone in the industry that consumers understand what they're being offered and that it is true to label," he added.

Money Management understands that TAL received no revenue from Choosi in the period since the website decided to list its brand as one of the insurance providers.

Furthermore, Suncorp confirmed that Asteron had no agreement with the website, nor was it notified of its brand being compared. also provides a "consumer reviews" service, which the website claims allows consumers to compare different life companies' offerings on factors including value for money, level of cover, ease of purchase and customer communications.

But on all fronts, Hollard-owned brands fared better than all other insurance companies listed on the website. The website, however, provided no explanation as to where the reviews were coming from. Zelman, who is planning to launch an insurance comparison website himself, said the process was extremely opaque.

"The brands they're selling get very high rankings on value for money, which shows how the process lacks credibility considering that the prices are generally 100 per cent more than the alternatives that are on their website," he said.

While ASIC would not comment specifically on Choosi, it found some websites did not provide sufficient disclosure "relating to website operators who were related to the issuer of the insurance brands being compared".

Choosi was contacted for comment, but failed to get back to Money Management before the print deadline.

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