Home loan provider in hot water over super switching advice
ASIC has accepted an enforceable undertaking from a home loan and insurance provider after they failed to provide adequate statements of advice on switching life insurance and superannuation products.
In a public communication, the Australian Securities and Investments Commission (ASIC) said it has accepted an enforceable undertaking from Duane Wright and his business, First National Home Loans and Insurance Pty Ltd.
According to ASIC, Mr Wright failed to undertake adequate inquiries into the relevant personal circumstances of some clients to whom he made recommendations to switch life insurance policies and also failed to provide adequate replacement product advice in the Statement of Advice, preventing the client from making an informed decision to switch life insurance and superannuation products.
ASIC said that Mr Wright advised purchasing life insurance that was too expensive for the client, failed to consider the longer term impact on retirement savings of placing life insurances within superannuation, and failed to provide accurate information about the client’s circumstances within the Statement of Advice.
Under the EU, Mr Wright and First National have agreed to undergo additional training in relation to the provision of financial product advice and must adhere to strict supervision requirements for 12 months, with all their advice audited by the authorising licensee before it is provided to clients.