[Opinion] More on a FSCL decision – issues for advisers to consider

In a reported complaint to her insurer and FSCL, a person apparently paid premiums totalling $37,000 over 17 years, for a funeral benefit of $10,000.  Although the complainant was paid compensation by the insurer (the basis for such compensation and its value is unknown to me) the client also made a complaint to FSCL against their adviser, who ‘sold’ them the policy in 2007!  The adviser agreed to pay $500.  

JP Hale has recently written a piece on some aspects of this issue. I want to explore the possible practical implications for advisers and FAPs, of FSCLs reported “Insights for advisers” in the case study (read it on their FSCL’s website, it’s under life insurance, not funeral insurance).

According to FSCL:

• “Advisers must ensure insurance policies continue to meet the needs of each client, each time it is renewed”; and
• “The adviser should have turned their mind to the fact that (the client) had paid triple the amount of cover in premiums at the time of renewal.”