ASIC convinces parliamentarians on life/risk advice

A key Parliamentary committee appears to have accepted the explanations of the Australian Securities and Investments Commission (ASIC) with respect to the number of potentially non-compliant financial advisers in the life insurance industry.

The House of Representatives Standing Committee on Economics dedicated a section of its report emanating out of its Review of the ASIC Annual Report, to the regulator’s assessment of life/risk advice and, in particular, confusion around how many advisers might have been guilty of churn.

In doing so, the committee chairman, David Coleman said it had “noted current public confusion regarding statements made by ASIC in relation to the number of potentially non-compliant financial advisers in the life insurance industry”.

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“The committee asked ASIC for clarification of whether it believes 50 financial advisers were at greater risk of having high lapse rates, or whether 50 per cent of advisors were potentially non-compliant,” Coleman said in his report.

He said that ASIC had noted that it was currently collecting data about advisors with high life insurance lapse rates and explained: “As part of the initial data that came through, we identified around 500 advisers with potential issues around higher levels of lapse rates. Of course, there may be quite legitimate reasons why people are being switched or moved between products. We can't go in and undertake high-intensity surveillance of every single one of those. We've narrowed it down to a much smaller pool in the first instance to go and look at and do more in-depth surveillance”

Coleman’s report said that while ASIC remarked that some media articles suggested only those people were possibly causing problems, it added that ‘we are still, unfortunately seeing some problematic advice around life insurance in the surveillances that we undertake’.

“ASIC added that the potential number of non-compliant financial advisers in the life insurance industry is ‘not limited just to that smaller target group that has come up through our first data-gathering exercise.’”

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This is a joke, all these assumptions, whatever happened to innocent until proven guilty? I would love to sue some of these talking heads for making incorrect statements and inferring we are doing the wrong thing by our clients. They cant just spout this stuff and tarnish our industry with no proof and get away with it! Sick and tired of the numpties that no nothing making all the important decisions that are making it harder and harder and more expensive for us to operate! Cmon FPA and AFA get into the media and rebutt this stuff please this is what we pay our membership fees for, so you can speak for all of us!

TJ there are bad apples in the advice industry that churn and flog product. You know it. I know it. We all know it. What the FPA and AFA should be doing is helping to get the bad apples out of the industry, not pretending they don't exist.

Really Jason, thats interesting, so I pay my AFA fees not to promote me or my industry when we are lied about, but you think my fees should be put towards the AFA staying silent and trying to get rid of the so called bad apples instead? Seriously? I dont know the churners or product floggers, they arent in my circle. If you know who they are I hope you are reporting them! Even if there were some left, why would that stop the AFA and FPA for making some positive statements about us and the ones that do the right thing in the press? Thats like saying the NRL shouldnt ever promote its players or the game are there are some that do the wrong thing in it, its just a copout.

Is there any significant difference between 50 advisers, or 500 advisers or 50% of the entire industry????? I guess ASIC personal don't have an issue with seeing a professional and being given a number between 50 and 7000 as correct?????? Perhaps I should report all investment returns as likely to be between 0.5% and 50%..... I guess my clients have higher expectations off me as a professional than our pollies have of ASIC as a professional body.

ASIC are just making this up as they go along. Is it 50 or 500? (both round number estimates!) So it it less than 1% of risk advisers or less than 2%. Why won't they release how they came about 413 from a mere 200 files or better still just admit they purposely got it wrong for extra funding and were also duped by the FSC.
The losers are the end customers who will now have to pay fees for risk advice and the winners are the insurers profits. What a joke this is. And where are the other jokes of this industry the AFA and FPA?

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