The National Insurance Brokers Association (NIBA) has urged the Government to clarify its position on personal advice in its revision of the Future of Financial Advice (FOFA) legislation.

In its submission on the proposed FOFA amendments, NIBA says the client-interests section presents problems when brokers give personal advice in addition to general insurance advice.

“Use of the word ‘solely’ in the section does not appear to carve out personal advice in relation to general insurance in circumstances where other advice or remuneration may have been received in relation to non-excluded products,” it says.

“The same issue was identified and fixed by way of regulations in relation to the best-interests duty and conflicted remuneration sections, but not for the prioritising clients’ interest section.”

The previous Labor federal government planned to change the rule for insurance brokers, but then lost the election.

NIBA has also flagged an issue with the proposed best-interests amendments.

The changes will allow scaled advice, by limiting the amount of investigation an adviser undertakes. But the association says there are concerns over whether advisers and clients can agree on the scope of advice to be provided.

“NIBA notes the changes will be useful in reducing the potential exposure of advisers under the legislation, but care will need to be taken to ensure appropriate investigations and advice is provided,” the submission says.

“This is especially the case in relation to advisers acting for or related to product issuers.

“NIBA notes it would be a brave product-issuer that sells a product and at the same time gives advice on whether it is appropriate to the client or not.”

It argues this would cause conflicts of interest and liability exposure.