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Risk advisers to benefit from fiduciary duty

FOFA's best interest duty provides a “tremendous opportunity” for risk advisers, a CommInsure executive has told Synchron conference delegates.

Speaking at a recent Synchron conference, CommInsure executive manager, business growth services, Jeffrey Scott said that in particular the 'safe harbour' provisions of the best interests duty will impact risk advisers “in a big way”.

"If a client walks into your office and they have an existing direct policy, retail policy, or have life insurance via an industry super fund, even though these products may not be on your approved products list, you now have an obligation to your client under the best interests duty to investigate these products and compare them against products you are going to recommend,” he said.

Mr Scott said this gives risk advisers the opportunity to demonstrate they have acted in the best interests of the client “by comparing: premiums, underwriting terms, conditions of release, exclusions, ancillary benefits, preclusions periods, ability to remove benefits and features, and cessation of benefits”.

Mr Scott added that different polices have significant differences and only a thorough analysis can ensure that the client is receiving the best value for money.

The most expensive policy is not always the best policy, nor is the cheapest policy always the best value for the client,” he said.

“It is worthwhile for an adviser and their clients to compare the pair.”