FSC policy replacement guidelines 'irrelevant'
The FSC, which represents life insurance, superannuation and managed fund providers, has produced a brochure and form for advisers to give to clients who are thinking about replacing risk products.
In 2010, the Investment, Savings and Insurance Association drafted some similar guidelines but FSC chief executive Peter Neilson said they never gained traction, partly out of fears that they were anti-competitive and partly because of the looming regulatory overhaul.
“Now we have regulations and the FMA has made it clear that it expects advisers to give holistic, useful advice and act in the best interests of clients. But how do you establish that unless there is a process for doing so?’
The FSC’s form says it should be whenever an existing Term Life, Disability, Trauma, and/or Income Protection policy or benefit is to be replaced, exchanged or converted.
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