The ClearView saga is back in the media’s sights with the Australian Securities and Investments Commission’s (ASIC) announcement their compliance review into the entity has resulted in an order for over $730,000 to be paid in compensation to 200 clients.
ClearView was one of members of the financial services to receiving a grilling at the Financial Services Royal Commission hearings last year.
This also comes after an industry review of the life insurance industry which found that, out of 200 advice files reviewed from large, medium and small Australian Financial Services licencees, only 63 per cent were compliant, with close to 40 per cent failing to comply with the laws surrounding appropriate advice.
The corporate regulator has also received over 4000 advice files from almost 300 advisers. While 215 clients had been remediated, the remaining 21 received what ASIC referred to as ‘non-financial remediation’ in the shape of reissued documents and fee disclosures.
Key areas of concern for the regulator were:
Inadequate needs analyses;
Lack of explanation around superannuating fund insurance premiums;
Inadequate consideration of premium affordability; and
Poor disclosure around replacement products.
It is with the ‘needs analysis’ that ClearView’s financial advisors failed to meet expectations.
ASIC’s review, conducted jointly with Deloitte, acting as independent overseer, found that ‘a number’ of advisers failed to meet adequate needs analysis requirements. The purpose of the review was to check for systemic issues.