Don’t unnecessarily entangle advisers says FPA
The Financial Planning Association (FPA) is seeking more certainty from Treasury that financial advisers are not going to be adversely caught up in the Government’s proposed new insurance claims handling machinery.
In particular, the FPA wants it made clear that financial advisers will be able to handle the insurance claims of new clients without having to take on extra licensing obligations.
In a submission filed with the Treasury in response to the Financial Sector Reform (Claimant Intermediaries) Regulations 2020 the FPA said financial planners were already appropriately licensed and regulated by ASIC and so should not be exposed to any additional requirements to continue assisting their clients with insurance claims.
However, the FPA said it was seeking clarification from the Treasury about the application of the exemption in circumstances where a client has changed financial planner and an insurance claim is the first substantive interaction between the client and their new financial planner.
“This situation can occur frequently for a variety of reasons, including that there is often a significant amount of time between a client receiving advice on an insurance policy and the point at which they might make a claim against that policy,” it said.
The submission claimed that, in this time, the client’s original financial planner may have retired or the client may have relocated and engaged a financial planner in their new location.
“It is in the client's interest to be able to receive assistance with their insurance claim from their new planner immediately and the exemption should apply in these circumstances,” the FPA submission said.
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