AFA warns ASIC on inadvertent adviser anti-hawking impacts

AFA/ASIC/australian-securities-and-investments-commission/financial-advisers/association-of-financial-advisers/life-insurance/insurance/

4 September 2019
| By Mike |
image
image
expand image

The Australian Securities and Investments Commission (ASIC) needs to be careful to ensure that financial advisers are not inadvertently caught up in the new, tougher anti-hawking provisions around the sale of life insurance products, according to Association of Financial Advisers (AFA).

In a submission responding to ASIC’s tough new approach to unsolicited telephone sales of direct life insurance and consumer credit insurance, the AFA has backed the banning of unsolicited telephone sales of life insurance but has warned of the need to avoid unintended consequences.

The AFA said that life insurance was a complex product that should never be sold without the benefit of personal financial advice in circumstances where the average Australian was unlikely to have a good understanding of their insurance needs or the products available.

However, the AFA warned ASIC that the consumer protection messaging around life insurance needed to be carefully modulated to ensure that the value of life insurance was not undermined.

 It also noted the anti-hawking provisions and warned against allowing financial advisers to get caught up in the definition of “unsolicited”.

“One important consideration for us is the definition of ‘unsolicited’ and the risk that a financial adviser contacting an existing client about the suitability of their current insurance could be considered unsolicited,” the AFA submission said.

“We also believe that extra consideration needs to be given to financial advisers who work with regional and remote clients, where interaction with their clients is more often done via the telephone,” it said. “We would not like to see this proposal place limitations or additional costs on these regional/remote financial advisers.”

“In addition, given the changes in communication technology, maybe there is a need to address other forms of contact that are possible through social media applications.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 5 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 4 days ago

TOP PERFORMING FUNDS