The Australian Securities and Investments Commission (ASIC) wants life insurance research houses to separate their consulting operations from analytical services.

In a new consultative paper, ASIC says a key conflict of interest issue for researchers is whether they should accept payment from companies to write reports on their products.

“ASIC is seeking feedback on whether these conflicts of interest associated with product issuers paying for research can be effectively and robustly managed or should be avoided entirely,” ASIC Chairman Greg Medcraft said.

“Research report providers are a significant gatekeeper in the market and it is expected they adhere to high standards of conduct.

“Research can influence which products individual advisers recommend to their clients.”

Mr Medcraft says the quality of research and the conduct of research houses have a material impact on the integrity of the financial planning industry.

“Research is an important consideration for ASIC in light of our priority to promote confident and informed investors,” he said.

ASIC is also looking at the adequacy of skills and experience of research analysts in producing quality research. It also wants more transparency and comparability for research methodology used by the houses.

ASIC says financial advisers told it they want more in-depth research on products rather than the research houses trying to cover everything.

Comments on the research house consultation paper are due by February 3.