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.
Our Industry has been built on passion and belief and I don’t think that will ever change. Our Industry may be decimated by these reforms but our passion and belief will never be taken away. Take pride in what you have done for your clients.
I wonder if Mr Kell would feel the same way if HE was the one who had been shafted by Trowbridge and the FSC. He clearly has no understanding (or perhaps no interest) in the general level of anger felt by the adviser force over this.
The modus operandi of a bank is clear and evident…it does not change from one side of the business to another. They promote and encourage churn of product more than any other business. “Move your credit card here and get interest free for 9 months before we start charging you more than you were paying with the original credit card” (they tend to leave that part out – they obviously don’t have an enforceable best interest duty for banking). “Oh you have a credit card with us already – well we can’t help you, you’re an existing customer and already paying our high rates of interest!”. If the government and/or ASIC believe they have different morals for different products…
In the schoolyard, there will always be an “urger “.
He is the bloke that starts the brawl but never takes side and steers away from flying fists.
ASIC, having completely ignored the bank driven bad culture of the insurers, is looking to graduate from picking favourites, is seeking to occupy the higher ground.
Somehow its the advisers fault the new bank twists risk policies every time a client changes banks. Somehow take-over terms on an existing book is all the advisers idea, not insurers. And when advisers move to an insto-backed dealer, its the advisers fault that they succumb to special deals and “invitations ” from BDMs to move the risk book to the insurer that owns the dealership. Remember this ASIC, for every dollar an adviser makes from insurers the insurer makes 7 dollars
ASIC back the insurers everytime. They ignore the situation that advisers using a commission model are PRICE TAKERS, not price makers. Now, having stirred up the advisers bee nest, they tell us we should rise above it. In the interests of our clients of course.
Up until the time insurers were first sold to banks, the culture at insurers always had a long-term view, because they knew they could hold the clients introduced by their advisers for decades. These days, the “seal the deal, move on, collect the management bonus ” nature of banking has permeated even those life offices NOT managed by banks as a cash cow.
What Peter Kell ought to do is go back to the place from which he crawled from.