Advisers must ensure they cover all a client’s insurance needs under proposed best interest duty regulations, according to WHK National Head of Lending and General Insurance Terry Lingard.

“At WHK we have the various insurance specialists, financial advisers, mortgage lenders and accountants working together to make sure a client’s best interests are looked after,” he told insuranceNEWS.com.au.

“The client might not have a direct relationship with the insurance specialist but they would with their accountant or financial planner, so we bring in the specialists to the meeting when they are needed.”

Mr Lingard says it is important relationships are managed carefully to avoid alienating clients.

“We don’t want a $500 general insurance commission endangering a $5000 fee from a client because of a misunderstanding. This is why we do a full analysis when talking to a client of all their needs, including life and general insurance.”

Mr Lingard says this is important in areas such as self-managed super funds (SMSF), where a variety of insurances are needed.

“These can include life insurance for the trustees, property, including third-party liability, and collectables,” he said. “Regular valuations on assets in the fund are required for insurance and the tax treatment of the cover is part of acting in the client’s best interests.”

Mr Lingard says advisers will have to offer more expanded advice, including advising on tax issues for general insurance.

“This will include a proper risk assessment of the client’s full insurance needs if they want to avoid professional indemnity claims,” he added.

Advisers and brokers must also consider the auditing requirements of putting cover in SMSFs.

“SMSF auditors will want to see the insurance certificate, evidence of valuations and the paper trail for obtaining quotes for the cover,” Mr Lingard said.

WHK is expanding its insurance offerings to include business lines. “We are looking at advising on using insurance in succession planning, involuntary exits from the business by key executives and sell options by owners.”

Mr Lingard says the group is moving from being a product seller to an insurance adviser.