Take draft APL standard further, says FPA

The FPA suggests the FSC’s draft standard on approved product lists should be broadened in order for advisers to make better-informed decisions on their clients’ life insurance cover.

In a letter to the FSC, FPA policy manager Dimitri Diamantes noted concerns the current draft standard does not cover the need for insurers to provide information to help researchers and advisers to make informed decisions.

He said insurers should disclose all relevant information that would help determine whether a product be included on an APL.

He notes the current standard states that best practice is for the research process to consider factors such as medical evidence requirements, product design, policy terms and definitions, as well as whether the underwriting process is transparent and customer-focused.


“Much of the detail covered by these factors is found in the practices and internal policies of insurers, rather than any publicly available information,” Mr Diamantes said.

“The standard should insist that insurers produce relevant and reliable information to assist financial planners to select suitable products for their clients.

“This would promote higher quality research and, ultimately, help advice and consumer decisions meet a minimum socially acceptable standard.”

Mr Diamantes recommended the FSC standard should set uniform disclosure requirements, and that information and advice be readily comparable.

“Insurer product information should be prepared with a view to enable products to be simply and fairly evaluated in comparison to other products by financial planners when assessing product suitability for their clients,” he said.

Further, Mr Diamantes suggested FSC members should disclose to advisers whether products on the APL are ‘advice grade’, whereby an insurer’s or research house’s representations of a product are fair and accurate and can be fairly compared to other products.

Members should agree on which sorts of products meet the ‘advice grade’ based on the best practice principles in section 7 of the draft, he said.

“Such measures would assist financial planners to make more accurate evaluations and comparisons of an issuer’s products to the market of potentially suitable products relevant for a particular client,” Mr Diamantes said.

Take draft APL standard further, says FPA
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Adrian Flores

Adrian Flores

Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.

You can contact him on [email protected].

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