As few as 50 advisers at risk of ‘churning’
The Australian Securities and Investments Commission (ASIC) has further defined the degree of so-called “churn” in the life/risk sector acknowledging it could involve as few as 50 advisers.
ASIC deputy chair, Peter Kell said to a public hearing of the Parliamentary Joint Committee on Corporations and Financial Services that the regulator’s collection of data from insurers about lapse rates in policies had allowed it to build a picture with respect to churn.
“… ASIC now collects data from the life insurers about lapse rates in policies, which can be an indicator of inappropriate switching and churn,” he said. “It's still fairly early days, but what it has allowed us to do already is to identify a population of advisers that are potentially at risk of being in that category.”
“I think it was around 500 to start with. But, after applying a range of filters, it's allowed us to work that down to a much, much smaller number, and you can have a much more targeted and focused look at a much smaller number of advisers rather than a more scattergun type of approach,” Kell said.
He said that process was now in train and that ASIC was doing follow-up work on a much smaller number.
“It's less than 10 per cent of the initial pool of advisers where there may be a much greater risk,” Kell said.
Recommended for you
Clime’s disposal of advice licensee Madison “needed to happen yesterday”, managing director Michael Baragwanath has told Money Management, as he concludes a severe cost-out period at the business.
As Viola Private Wealth continues on its growth trajectory, the wealth management firm has appointed a seasoned investment professional to be its first chief investment officer.
Financial advisers who wish to implement artificial intelligence in their practices need to undergo a change in their mindset as to how they use technology.
With United Global Capital expected to constitute a substantial portion of CSLR compensation in FY25–26, what has AFCA ruled in its determinations on the company so far?
