Speaking to InvestorDaily following an adviser roadshow event, Asteron executive general manager Jordan Hawke said the company was taking ASIC’s report on risk advice seriously and accepting greater responsibility as a risk product manufacturer.
“The ASIC surveillance report really clarified some of the concerns the industry has and consumers have on the impact of upfront commissions on replacement business, best interest duty and what it means for the product manufacturer and the product development cycle,” Mr Hawke said.
Mr Hawke also confirmed that the insurer has terminated client relationships with 134 advisers found to have been recommending policy switches away from Asteron products that were not necessarily in the client’s best interests.
“[These advisers] had been substantially eroding our portfolios by moving significant amounts of business away from us so we have ended the relationship,” Mr Hawke revealed.
“We used data analytics to determine who the eroders were and then got in touch with them and their licensee to say we would no longer have a relationship with them for any new business and would actively write to their customers to remind them of the value of the insurance they have.”
As well as taking a stronger stand against unnecessary replacement recommendations, Mr Hawke said product manufacturers need to focus more on clients and less on chasing favourable research house ratings.
“We need to stop leapfrogging each other for best definition, cheaper premiums, and look at service revolution rather than a product push,” he said.
