Insurers and advisers need to stop trying to pin the blame for the industry’s problems on each other and to focus on helping their clients, argues ASIC deputy chair Peter Kell.
Fronting the Parliamentary Joint Committee on Corporations and Financial Services last week, Labor Senator and committee deputy chair Deborah O’Neill asked Mr Kell which “directives” had ASIC given advisers to improve the standard of their practices.
In response, Mr Kell told the committee that ASIC was “sick and tired” of insurers and advisers “pointing the finger” at each other and saying “it’s the other one’s fault as to why there are poor practices in the sector”.
“We have said that needs to stop,” he said.
“There needs to be a collective rethink of how advice is provided around life insurance so that it can better meet the needs of the customer rather than this cross industry fighting.”
Mr Kell added that ASIC’s surveillance of the life insurance industry – which forms part of the regulator’s Wealth Management Project – will continue until reform is introduced.
“[We will] continue with this enforcement work against major licensees [such as] imposing license conditions on Guardian which is a part of the Suncorp Group,” he said.
Referencing previous action taken by ASIC against a former senior Westpac adviser, Mr Kell said the regulator is also focused on taking action against individual advisers for “poor quality life insurance advice”.
He emphasised that the regulator is cracking down on the professional misconduct of advisers within the industry’s “six largest entities” through the Wealth Management Project.
“We have a number of projects under the [project] banner, including a focus on what these entities have undertaken over the past few years in terms of dealing with poor quality advisers,” he said.