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End of Life Choice Bill coverage focuses on insurers... it probably shouldn't

Australia: adviser negligence results in seven-year ban

Ian Victor Haisman, an Australian adviser has been banned from providing financial services for seven years by that Australian Securities and Investments Commission (ASIC). The ban was implemented as a result of his failure to act in the best interests of his clients. Ian Victor Haisman’s advice files were investigated by ASIC from 2016 to 2018. The investigation concluded that:

  • He didn’t adequately investigate his clients’ existing superannuation and insurance arrangement or provide product cost and risk comparisons when recommending an investment strategy which involved product switching
  • He recommended very high levels of insurance cover compared to his clients’ income and cases when he recommended life insurance policies to clients with no known dependents and no reasonable basis for the policies
  • He failed to provide statements of advice that were clear, concise, and effective to all his clients, the corporate regulator said

It is good to see regulators recognising insurance impacts in what are primarily investment decisions. That is a level of understanding of the interconnectedness of these issues which it would be good to see more of. It is important to focus on the comment about needing a reasonable basis for the policies. That was a major theme in a discussion I had yesterday with a bank and an insurer - the 'why' is important because it determines whether the customer will get benefit from owning the cover. Without it we are setting ourselves up for disappointment, lapse, claim failure, and damage to reputation. Everyone: not just insurers, but advisers too. Losing a licence, and therefore a livelihood, is no fun. 

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