This got me wondering what a life adviser’s conduct obligations might be when it comes to regular reviews.
Firstly, let’s deal with the adviser not knowing the client had a second policy.
Is it enough to simply expect the client to tell the adviser about policies the adviser has not implemented?
One can argue that clients should take responsibility for disclosing all their current policies (and any recently cancelled policies) to their adviser, but the likelihood is that is many won’t understand why this might be important and so may not.
I suspect advisers would be expected to front foot the issue with their clients and specifically ask the question (and make a record of both the question and the answer).
What are the adviser’s conduct obligations to get clients to undertake a review?
Generally speaking, advisers must take steps to see their client whenever events in a client’s life create a need for advice, regardless of planned regular reviews.
Some matters cannot wait until regular review time. For example, clients buying houses, having babies, or having a salary increase usually require an increase in cover or additional types of cover.
These changes should be implemented as soon as possible. Sometimes clients can increase cover quickly and without medical assessment under ‘special events’ benefits, but the time period to do this is limited, perhaps as short as 60 days after the event.
But what about annual or regular reviews where no apparent need for advice is obvious? Is it sufficient to offer clients a review, follow up once or twice when no reply is received and then, if a reply is still not received, simply assume the client doesn’t want one and leave it there?
Naturally, clients are free to decline a review, but they are not the expert and are unlikely to understand why a review may be important or why failing to undertake a review could be costly.
For this reason, I suspect a couple of simple telephone calls or emails by themselves may not be sufficient.
I believe advisers would now be expected to bring a level of structure to reviews. There are many questions an adviser should be asking their client at review (and not just “do you have policies I don’t know about?”).
These questions should be asked and answers recorded during review, followed by any necessary advice or recommendations.
I would consider sending the client this list of questions, appropriately framed, and with an explanation as to why a review is important (explaining possible consequences of doing nothing), when requesting a review.
This will allow the client to better understand the need for a review, giving them information that allows them to make an informed decision about declining a review.
