Risk Product, Company and Regulatory Updates as at 18 September 2018

Product Updates

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AIA Australia two year policy fee waiver offer
AIA Australia are waiving the policy fee for new customers for two years with new Priority Protection policies entered into before the end of 2018, saving $83 per year. The campaign is called Take a Break.

AMP updates medical definitions
A review has seen AMP update three medical definitions relating to cancer, Parkinson’s disease and cardiac arrest. Updated definitions include:

  1. The AIDS exclusion and Kaposi’s sarcoma (also related to AIDS) has been removed from the cancer definition, applies to legacy inforce products

  2. The Parkinson’s disease definition has been clarified with new wording, applying to AMP Elevate products from 2009 onwards and some legacy Australian Casualty and Life, AXA Risk Protection Package and Group standalone products

  3. The cardiac arrest (out of hospital) definition has been updated to allow for other medical evidence if an ECG is inconclusive or unavailable, applying to AMP Elevate products from 2009 onwards and some legacy Australian Casualty and Life, AXA Risk Protection Package, AMP Crisis Care, AMP Endowment, AMP WOL products and some legacy and current Group standalone products

OnePath premium waivers for drought-affected farmers
OnePath is offering farmers and those in rural areas/regional towns providing services to farmers affected by drought a premium waiver for two months. Eligible customers will have a OneCare pre OneCare or Direct Life non-super policy, and be suffering financial hardship due to the drought.

Company Updates

New fintech to replace paraplanners launched
A new piece of financial planning software has been designed by Advice Intelligence specifically to replace paraplanners, enabling clients and advisers to work together to plan a client’s financial future efficiently, while adhering to regulations. The software includes WealthMap, an advice creative collaboration tool to test future scenarios, and allows the client to track their financial plan. Because the tool tracks goals, cashflow and insurance, and provides an instant digital Statement of Advice, paraplanning is eliminated from the process.

Junior financial adviser roles at BT to go, advice restructure
BT Financial Group is making about 60 junior financial advisers redundant or finding them new roles. The BT Advanced financial planning division was a sort of incubator for new financial advisers. The Virtual Advice service is to be closed, which is primarily what the junior salaried advisers were working on. Workers are being encouraged to engage with the Finance Sector Union (FSU), which is currently in meetings with BT.

Regulatory Updates

Morgan Stanley false claims of independence
ASIC has revealed that Morgan Stanley Wealth Management was falsely claiming it was providing independent advice in an ASX announcement via Praemium. The company accepts volume-based payments and commissions from product issuers relating to providing financial services and advice. According to the Corporations Act, anyone using the word ‘independent’ cannot also receive commissions, volume-based payments or other incentives/conflicts of interest. ‘Impartial’ and ‘unbiased’ are also banned words in the same context.

ASIC commences proceedings against NULIS and MLC
NULIS and MLC, entities of National Australia Bank’s (NAB’s) wealth management division, are both facing court action after allegations of fees charged by both companies to many of their superannuation members for services that were not provided.

ASIC is alleging that NULIS and MLC Nominees (current and former superannuation trustee of NAB) misled MLC MasterKey Super members, and took over $30 million in service fees from 220,000 members who were in no-adviser plans.

An additional $67 million in service fees was deducted by NAB from 300,000 members of MLC MasterKey Personal Super where Plan Advisers were not required to provide services, and these members did not receive services (or any services they could not get for free). ASIC is seeking a declaration of contravention and a civil penalty.

FASEA shutting down so-called FASEA-approved courses
Some education providers have been jumping the gun, claiming to have FASEA-approved courses, despite no such course currently existing. Materials containing the false statements have been recalled from the providers.

AFCA complaints resolution rules, independent assessor terms approved
ASIC has approved the Australian Financial Complaints Authority’s complaint resolution rules, with these rules applying to all financial complaints, including superannuation disputes. ASIC has also approved independent assessor terms of reference. An independent assessor refers to who the person or business directly affected by how AFCA processes a complaint can complain to. All financial companies including credit representatives dealing with retail clients must join the scheme by 21 September 2018, transferring across from the Financial Ombudsman Scheme, which was in effect previously.