Poor financial advice investigated by the corporate regulator is “more often than not” related to life insurance, ASIC deputy chair Peter Kell has revealed.
Speaking at the Financial Services Council annual conference in Cairns yesterday, Mr Kell said ASIC's report into the way life insurance is sold through the advice chain will be released in the coming months.
“Why do we look at that area? Because it's still the case that when we find poor advice in a licensee, more often than not poor advice around life insurance is a key part of the problem,” he said.
ASIC believes remuneration structures play a role in the problem, he added.
“We know that the industry is trying to grapple with that, but frankly that hasn't come along far enough or fast enough and that's not going to do anyone in the industry any favours in the long term – let along the clients and the consumers,” he said.
ASIC will continue to work with the life industry as a whole to ensure consumers get better service and the sector remains sustainable, said Mr Kell.
On advice more generally, Mr Kell said the Financial System Inquiry interim report has made it clear there is “some way to travel” before the regulators will be “happy” with adviser education standards.
“Everyone in this room understands that there's a problem with trust at the moment. We need to rebuild, and ASIC needs to work on that,” he said.
“In our most recent stakeholders survey it was the case that only 23 per cent of people thought advisers acted with integrity – and that's not a good reflection on any of us,” he said.
“So we do need to lift the [level of] trust and … that's only going to happen if consumers are put at the heart of business models. And that hasn't been as evident as it should be,” said Mr Kell.
Mr Kell also welcomed the government's proposed adviser register.
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