The Australian Securities and Investments Commission (ASIC) says life insurance statements of advice (SOAs) are not a compliance tool for advisers, and should benefit consumers.

Deputy Chairman Peter Kell told a parliamentary joint committee hearing into the regulator that the Federal Government wants statements of advice overhauled.

“There is a perception these SOAs have not necessarily been that useful for consumers, and that is actually who advisers are supposed to work for, first and foremost,” he said.

“I suppose our starting point was that simply coming out with a model SOA that was pretty similar to what is out there at the moment. The definition of insanity is doing the same thing over and over again and expecting a different result.

“So we did deliberately take a bit of a different approach.”

Liberal MP Bert van Manen told the hearing the regulator’s draft statements of advice will attract many negative submissions, and Mr Kell conceded the consultation paper and draft statement have not been popular with advisers.

“Given some of the messages that have been left on my phone, I would think that is an accurate statement,” he said.

“We were asked to undertake a project looking at how we could potentially improve the consumer usability of SOAs for life insurance as part of the reforms.”

Mr Kell insists SOAs have to change.

“This is a genuine attempt to say, ‘Right, let’s not try and do the same old thing, let’s actually look at what is going to work here for consumers.’

“We are very happy to receive even highly critical feedback.”