BT Financial Group announced yesterday that it will be "further opening up" its life insurance approved product list, which currently consists of one insurer: Westpac Life.
In order to meet the Future of Financial Advice (FOFA) best interests duty, financial advisers are required to consider a wide range of financial products before making a recommendation to clients.
Appearing before a Parliamentary joint committee on Friday, ASIC deputy chairman Peter Kell was asked about a News Limited article that claimed BT Financial advisers only had one insurer (Westpac Life) on their APL.
"On the issue of approved product lists, I’m not sure that I can confirm that BT and Westpac only have one … I think we’d be a little surprised but we can take that under notice," Mr Kell said.
When asked whether he thought it was appropriate for a hypothetical wealth management firm to only have one insurer on its APL, Mr Kell said, "If you are providing personal advice to a client that’s designed to be in their best interests and appropriate to them, then it’s going to be a lot more difficult if there’s only one product on the list."
Yesterday's statement by BT said that despite Westpac Life being the only insurer on its APL, BT advisers have been free to recommend products "off APL".
"Over the past four years, every adviser request to use an insurance product not on the APL was approved, with seven different insurers being recommended more than 1,600 times over the last 12 months alone," said the statement.
BT has pledged to include "other high quality insurers on its APL" and said it expected there to be a "minimum of three by March 2018".
A spokesperson for BT said the changes had not come about as a result of Mr Kell's comments, and that the firm supported the move towards more products being on APLs.
A spokesperson for CBA told InvestorDaily its Commonwealth Financial Planning dealer group has three insurers on its retail bank planner APL and six insurers on its "relationship managed channel" APL.
CBA dealer group Count Financial has seven insurers on its APL, and Financial Wisdom has 10 insurers on its APL, said the spokesperson.
A spokesperson for AMP told InvestorDaily, "Our licensee APLs provide broad coverage of the major insurers, with Charter and Hillross offering eight products, and AMPFP six. We also enable our advisers to select a different insurance provider through an approval process, if it is in the best outcome for the customer. Our APLs are reviewed every year."
An ANZ spokesperson said: "Our APL for our aligned dealer groups have nine products from [nine] different providers. For ANZ planners, there are four products from [four] different providers."
"[ANZ] advisers are encouraged to provide an insurance product from the list that is in the customer’s best interests. We have an exception process so advisers can select insurance from providers not on this list if that is the best outcome for the customer," said the spokesperson.
A NAB spokesperson said its advisers have "at least two non-NAB insurance providers on their APLs, in addition to MLC Life, of which NAB is now a minority shareholder, meaning a minimum of three insurance products are offered."
"Advisers also have the option to use alternative products that are not on the APL with approval from their licensee," said the NAB spokesperson.
*Update: This story has been updated to include responses from NAB and ANZ.
Westpac replaces retiring chief risk officer
KPMG recruits AusSuper manager
Legg Mason appoints sales director