SuperTalk Blog

Industry funded advice service – a conflict of interest

 


Financial advisors industry funded advice service – a conflict of interest

An article in today’s AFR quotes the submission of ANZ to the Joint Parliamentary Committee which suggests that life insurers come together to establish a claims service to assist customers in making claims.

We have seen over the last few years many terrible stories about the financial services industry and conflicts of interest and the push by banks to make a profit at every turn, often at the expense of the customer.

It is good that banks and life insurance companies are looking at ways to assist customers in making claims easier. However, setting up a claims service funded by the very insurers consumers are claiming against is simply not the answer. Astonishingly, after everything that has been said over the last few years, some insurers and banks still don’t get it. They still don’t see conflicts of interest, even when they are so obvious.

Consumers must be able to have complete confidence that the person assisting them in the claim is on their side. If the funding for the claims service comes from insurers, consumers simply cannot have that confidence.

Are ANZ seriously suggesting that a service, which depends on it’s funding from insurers, will be able to advocate for claimants and fearlessly pursue those same insurers when they do the wrong thing in delaying or denying a claim?

If banks and insurers are genuine in their desire to make the claims process more user-friendly so that consumers can navigate the process themselves, there is an excellent opportunity which presents itself right now.

A superannuation and insurance code of practice is currently being worked on by the superannuation and life insurance industries. The code must streamline the claims process, require the exchange of information and documents promptly, and impose time limits on claims and complaints. It must also have a code compliance committee with enforcement powers.

A robust, fair and enforceable Code of Practice is the best way to ensure the interests of consumers are protected.

We hope that ANZ and all insurers and super funds will focus their efforts on the development of a Superannuation and Insurance Code of Practice and not be distracted by yet another idea involving a conflict of interest that won’t reduce disputation and most importantly, won’t help customers.

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