If in doubt - disclose

How's that strange new world looking, different or much the same?

Monday, April 19th 2021, 2:30PM

by Jon-Paul Hale

Much the same but a bit different for me. The odd bit has been the sign-off and return of scope of service and disclosures.

Something that has had push back in the past and somewhat challenging to get done at times is now whistling back the same day or the next.

I don't get it, it's five pages longer than it used to be and contains much more on the objections raising piece, yet it's getting done without a hassle.

Is this some shift with Covid that I missed or just people saying it's "lots of words that cover what I may be concerned about?"

One of the more common questions I'm hearing is the one around what and when should I disclose?

Short story long - if you feel there is a need to provide disclosure, it probably should have been done already.

A couple of things that have circulated around this theme are the reviewing of existing and the finishing off of those agreements that were in progress after the changeover to the new rules.

The short answer is yes, disclosure under the new rules is required, you're still giving advice.

A new scope of service needs to be negotiated, and a discussion around ongoing servicing needs to be had.

But that's not all. I've also seen a couple of examples where general insurers have fired out blanket disclosure documents to the market, 80 something pages of it. One file with every broker included.

Umm...technically correct, it's been given, but in reality it's likely to be looked on as not being client-centric and questioned by the FMA. Don't do this - just don't.

Scope of service and disclosure is an opportunity for you to demonstrate you are a professional adviser. Take the opportunity to look professional and valued for what you do. It is the most significant missed opportunity in your whole process.

Yes, I have been talking through what is required by the new disclosure for years in my previous standard process - the difference is now it's written down.

I probably should have done it earlier - I feared it was too much and would get pushed back on (which was the general feedback from most advisers). But it wasn't, and it's not.

And frankly, for those that aren't engaged and pushing back, they probably shouldn't be your clients as not taking an interest in this stuff now is going to be a problem for you later.

Servicing. I talked about this recently and I don't think the message is getting through.

What you know about your clients that could cause an issue with their plans is an issue for you. If you are not actively tackling these issues and highlighting them for your clients, you will be liable for them.

Yes, we still have section 10 of the 1977 Act around disclosure to insurers while working through an application - but we now have liability over what we don't cover and address with clients.

How broad that scope is depends on how you define your scope of service. And you can't scope yourself out of the law on this either.

I've been both surprised and unsurprised by people leaving the industry.

Unsurprised by the numbers that didn't get sorted. Surprised by the timing of those that have chosen to leave.

I was expecting that many would do their last couple of years and then drop out. But there's been quite a number that have dropped out from day one.

The likes of Graeme Lindsay, and others like Warren Duff, who have shaped our industry over the last few decades, need to be commended on their dedication and commitment to the industry.

Life insurance is not an easy business and to not only survive but also drive the shape of the industry is something we need to be consciously aware of.

Personally, the discussions and chats with Graeme and others that are professional and of tenure in our part of the world over the last two decades has allowed me to stand on the shoulders of these giants.

Those of you out there know who you are, some are no longer with us, and some have many years ahead of them.

As we say goodbye to the old and welcome the new, I say thank you to those that are not continuing the journey. Your contributions haven't gone unnoticed or unappreciated, quite the opposite!

Tags: Disclosure Financial advice Jon-Paul Hale regulation