Brokers have little to fear when the best-interests duty is introduced on July 1, according to National Insurance Brokers Association CEO Dallas Booth.

“Only the first four conditions of the duty apply to brokers and these are no different to the broker’s current duty,” he told insuranceNEWS.com.au.

“A good broker will already be making sure the client is getting the best result, because they are acting professionally.”

Brokers will be required to warn clients if advice is based on incomplete or inaccurate information.

But they will not have to prioritise clients’ interests before giving the advice.

Failure to meet the best-interests duty will be a criminal offence, but the Australian Securities and Investments Commission (ASIC) says it will take an “educational approach” in the first year, rather than prosecuting breaches.

“The best-interests duty will be more onerous for those brokers handling life insurance as well,” Mr Booth said. “There will be no easy money to be made in life insurance broking.”

Most brokers already meet paperwork requirements for the duty, he says.

“We are not expecting any significant changes to how brokers create their paper trails to protect themselves.”

However, authorised representatives must be careful, because ASIC says it will monitor groups’ management of their staff, Mr Booth says.

“ASIC did a review of mortgage brokers and their authorised representatives, and that gave some indication of what the regulator expects from groups managing their sales teams.

“I have been telling our members to look at what the regulator is looking for in supervising representatives.”