Despite increasing regulations and the introduction of NCCP, some brokers are failing in adequately advising their clients of potential risks, says one broker trainer.
Barry Doherty, Senior Assessor at AAMC Training Group and ex-finance broker, says with the bushfire season underway it’s a poignant reminder that brokers must ensure their clients are sufficiently protected in both life and property.
“There are some people coming into the industry that think their job is done when they’ve written the mortgage.
“I think brokers, for what we do, are pretty well paid and it’s not enough to think that once you’ve got final approval that’s it… but you have to know these things you have to know your client to know your business.”
NCCP and increased qualification requirements from member associations have helped to educate brokers further, but Australia is still lagging behind its international counterparts in these stakes, says Doherty.
“I think it’s helped tremendously because we’re educating people now. One of our trainers has reported back to me that there has been a gratifying shift in business practice around insurances due to the fact that our courses emphasize the responsibilities that brokers have under their Duty of Care. I can go back probably 20 years to when fact finds were done with a blank piece of paper and a pencil. Fortunately that has changed.”
While there is no legal compulsion for brokers to sell insurance protection, Doherty insists brokers need to be more proactive when it comes to advising clients of the personal financial risks they could face in the event of an accident, disaster or illness.
“Failure by the broker to warn clients of the incumbent risks to do so could mean facing litigation and the courts in Australia may deem the broker negligent under the Duty of Care. Could get costly! Why place yourself in this position when it is said, Australia is second only to America in the litigious stakes?”