Broker clients expect to be given personal advice and intermediaries still operating under the general advice model should convert, the National Insurance Brokers Association (NIBA) Convention heard.

The convention wrapped up in Sydney last week and featured a panel discussion on personal/general advice.

Principal Solicitor at Radford Lawyers Mark Radford told attendees that personal advice involves consideration of a client’s needs, objectives and financial situation, while general advice is “a lot less than that” and “not of great value”.

It’s vital that brokers clearly inform clients where they are not providing personal advice, and those that switch between the advice models create particular risks, Mr Radford says.

“When you’re changing hats this can increase confusion and increase the obligation to make it clear what you’re doing for the customer.”

NIBA President Dianne Phelan says most retail clients would expect brokers to provide personal advice.

“[Personal advice] is what we’d prefer brokers to be delivering where it’s possible to do so,” she said.

CEO Phil Kewin told insuranceNEWS.com.au NIBA is planning a survey of members to get a sense of how many are still operating under the general advice model.

“Anecdotally, we hear that brokers are transitioning to personal advice,” he said, adding that any reluctance to make the move was probably down to “inertia in keeping an old business model”.

Mr Radford says both the upcoming Quality of Advice review and Australian Law Reform Commission review will address the issue and hopefully simplify requirements.

“It’s about simplifying what’s there, which will enable those who want to give personal advice to do it more effectively,” he said.

“It’s all good news. Everything is going to be simplified. It’s going to make it easier for you to give personal advice. It’s going to make it easier for consumers to understand it, and it’s in line with us in terms of adding value to customers as trusted advisers.”