FSI focus could catch broker schemes

NIBA CEO Dallas Booth has warned that the Financial System Inquiry’s push to make those who create financial products more accountable could impact on broker-run schemes.

The NIBA chief appeared at an insurance law symposium held by DLA Piper in Sydney last week to discuss the year’s big challenges.

He says the overwhelmingly focus of the FSI is shifting responsibility from consumers to those who manufacture or distribute financial products.

This, combined with recommendations such as ASIC being given the power to restrict distribution of or ban products that risk detriment to consumers, have strong potential to catch up on brokers who put together facilities.

“Nearly every broker seems to have a scheme of some nature,” he says.

“That’s when the really interesting question about this obligation means for manufacturers and distributors arises.

“We are looking really carefully at this stuff and will be heavily discussing this with the Federal Government in the coming months.”

Booth also spoke of his pride that none of the recent scandals involving poor quality financial advice had involved insurance brokers.

“I’m absolutely proud of the fact that I can go to Canberra and talk to Treasury or I can go to ASIC and talk to Peter Kell and there are no issues or concerns about brokers being drawn to our attention,” he says.

“It is that simple and that’s a fantastic position. The NIBA Board of Directors has been committed to professionalism for more than 20 years and we exemplify it through NIBA College and the Insurance Brokers Code of Practice.

“Nonetheless, the NIBA Board has asked me to look at what else can and should be done to really entrench the members of NIBA as a true professional body in financial services in Australia. That’s one of the major projects for this year.”