The corporate regulator is currently putting approved product lists under the microscope, deputy chair Peter Kell has told federal MPs.
Appearing before the parliamentary joint committee on corporations and financial services, Mr Kell was asked to comment on the assertion – reportedly published by News Corp Australia – that advisers within the Westpac network are subject to an approved product list featuring just one insurer.
“On the issue of approved product lists, I’m not sure that I can confirm that BT and Westpac only have one … I think we’d be a little surprised but we can take that under notice,” Mr Kell responded.
However, while unable to speculate on the specifics of APLs within the Westpac group, the regulator explained that the broader issue of product recommendation and incentives for financial advisers is currently a top priority for ASIC.
“We are currently doing some work, finalising some work, looking at how APLs work in practice and looking at whether advisers use the full range of products on an APL,” he said.
“I think there are two issues here: one is having a broad range of products on an approved product list, so products which are appropriately chosen to ensure they’re suitable for customers, but the second issue there is that even if you have a broad range of products on that APL, will the advisers actually choose from across those products in ways that are beneficial for the customer? So they’re both issues for us, and setting a simple rule like the Trowbridge rule won’t necessarily fix that second issue.”
Mr Kell said that ASIC is not of the position that there must be a certain number of products on a particular APL, but said there is a consumer expectation that advisers would have access to multiple financial products.
ASIC’s clarification of section 923A of the Corporations Act in June cast doubt over the ability for an adviser to legally describe themselves as “independent” while operating under an APL.
The necessity of APLs from the perspective of PI insurers is one of a number of arguments made in a white paper released by the AIOFP and Smart Compliance director Brett Walker seeking repeal of s923A.
ifa has approached Westpac for comment.
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