Three years on from the Australian Securities and Investments Commission (ASIC) report regarded as the catalyst for the Life Insurance Framework (LIF) key elements of the life/risk advice sector are questioning whether the action was justified and whether it has been underscored by regulatory action.
Money Management has received an analysis from a section of the life/risk adviser segment which questions ASIC’s assertion to a Parliamentary Committee that more than half of the advice provided by independently owned licensees was non-compliant.
“What action has been taken against these licensees responsible for advice where more than half of it was non-compliant,” the analysis asked.
The analysis also pointed to ASIC’s original Report 413 which it said had pointed to seven licensees including two large licensees and three medium-sized licensees and asks why no action has been taken against more than one over the past three years.
“What other regulatory action has been taken against those caught out by ASIC Report 413?” it asked. “Surely some action must have been taken against the non-institutionally owned licensees that generated an above 50 per cent fail rate.”
“Never before has a report caused so much demand for change and fundamental reform, yet appears to have delivered such little regulatory action,” the analysis said.
It claimed that it was time for the Government and ASIC to explain what was going on in circumstances where three years had passed with little regulatory action underlining the need for the LIF.
Money Management’s Life/Risk Breakfast will be debating the current regulatory framework around life/risk on Thursday 19 October.