An Auckland-based financial adviser, who failed to make adequate inquiries on client medical histories in insurance applications, has been found to be in breach of the code of conduct.
An article by Good Returns detailed the decision of the Financial Adviser Disciplinary Committee on the case. The adviser has breached code standard eight – requiring him to ensure personalised advice was suitable for clients – in relation to two clients.
The first client reportedly described his meetings with the adviser as rushed and conducted under time pressure. Additionally, he did not make any medical disclosures in his application to Partners Life – matters the code required of him. The client reportedly realised this when he went to another adviser, who later put him through a more rigorous application process.
“The issue is whether the [adviser] can be said objectively to have made reasonable inquiries about [the client’s] risk profile at the time the application to the former insurer was made,” the committee said. “It is clear that more could reasonably have been done to ensure up-to-date knowledge.”
Meanwhile, the second client reportedly stated in evidence that his meetings with the adviser were never more than 30 minutes. He reportedly met the adviser while covered by a Sovereign policy subject to a back pain exclusion. However, on applying for a Partners Life policy the injury was not disclosed – and the policy was later cancelled when the full medical history was revealed.
It was outlined by the committee that the client had disclosed what he thought was relevant, and that the adviser reportedly knew about the exclusion but chose to ignore it.
Now, the committee moves into the disposition stage and the parties have been asked to make submissions on what, if any, action it should take, Good Returns added.
The adviser, whose name was suppressed, specialised in providing advice to members of the building and construction industry on income protection, trauma, health and life insurance.
