Complaints could be avoided: ISO
Complaints about financial advisers are often caused by miscommunication and misunderstanding, the Insurance and Savings Ombudsman says.
Thursday, June 12th 2014, 6:00AM
Karen Stevens said only a small number of the 3000 enquiries the ISO received each year were about advisers.
But she said those that it did get were often about the quality of advice or miscommunication, misunderstanding, or fees.
“The good thing is many of these issues can be avoided if financial advisers have robust processes, check details, and communicate clearly and regularly with their clients,” she said.
“In one case, an adviser didn’t inform his client’s insurance company that his client hadn’t been smoking for 12 years. Therefore his life insurance premiums were higher than they should have been. The client mistakenly thought it was his adviser’s responsibility to inform his insurer of the change in his smoking. This highlights how important it is for advisers to describe their role and regularly communicate with clients. It also demonstrates how many clients do not understand what their obligations and responsibilities are."
She said another adviser filled out a health insurance application on behalf of her client, and did not declare details about ongoing health issues.
"When the insurance claim was declined due to non-disclosure, the client said it was his adviser’s mistake. It’s wise for financial advisers to ensure their customers complete application forms, and to make sure their clients are fully aware of the duty of disclosure and the potential consequences of failing to disclose information.”
She said complaints were valuable feedback for the financial services industry.
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