An insurance industry expert has warned authorised representatives that they could be next under the ASIC
’s recent prosecution against dishonest brokers
and major insurers with misleading advertising campaigns
, Sheila Baker
, managing director of GoldSeal, has noted that AR’s are likely to be one of the next targets ASIC
takes aim at.
“AFS Licensees in the broking sector have had a pretty clear run to date, compared to our cousins in the Financial Advice world,” Baker said.
“However, the growth of broking AR networks has been so pronounced that it seems a matter of time until the regulator shines its light into these corners closer to home.
“We want to remind Licensees of the need for their own risk management practices to focus on the professionalism and conduct of ARs.”
Based on its insurance industry experience, GoldSeal has highlighted five areas of the AR network that could come under greater scrutiny from the regulator in the coming year and beyond.
- Websites – Is the wording used on the website compliant with marketing guidelines and is the AR aware that those guidelines extend to the use of social media for advertising?
- Record Keeping –does the licensee have access to client information in the absence of the AR?
- Training and Education - are ARs adequately qualified to meet ASIC requirements and have they completed all qualifications needed?
- Understanding ‘FSR Basics,’ - what is personal vs general advice and what is their authority level on the advice they provide to clients? Do they know the difference between retail and wholesale products and clients?
- Sufficient controls – does the licensee have the controls needed to minimise the risk of non-compliance, or fraud?
“Mostly, ARs are thoroughly professional insurance experts, but running even a small AR network is in many ways a compliance job,” Baker continued.
“Any complacency could attract ASIC
attention. As an industry, let’s keep demonstrating the professionalism of intermediaries and keep the ASIC
regulators at bay.”