#NIBA2020: Broker Code of Practice

During his afternoon concurrent session on day three of #NIBA2020 (available on demand soon), legal advisor, Mark Radford of Radford Lawyers, talked to delegates through the proposed changes (subject to further discussion) to the NIBA Code of Practice, as a result of the review that is being conducted.

Radford said they’re proposing to extend scope of service to standalone risk management-type services, where there may not be insurance connected with it. “It’s really just going to cover what people would provide by way of other risk management services that aren’t purely insurance linked or related,” he explained.

Furthermore, Radford said that in terms of the standards that apply under the code, there are a number of refinements they’re proposing to make.

“Conflict of interest requirements in the code are being refined, and they’ll be made more detailed, providing better guidance to members in what’s expected,” he said.

There will also be changes to clarify and improve how brokers are required to describe who they are acting for, and in relation to what services. “We all know brokers can act in a number of capacities, so it’s crucial that we’re clear to customers about that.”

Radford said they’re also looking to improve the clarity around the types of services brokers are offering, for example, a personal advice service versus a general or no advice service. He said it will give client’s a better understanding of the advice they’re receiving

In terms of the most significant changes, remuneration is the big one according to Radford.

The proposed changes to remuneration are all focussed on brokers putting in place practices to deal with the issues relating to proper disclosure of remuneration, clear disclosure of roles and proper management of conflicts of interest.

There will also be an entirely new section of vulnerable clients and the protection of vulnerable clients, along with a number of new complaints and disputes processes.

“Anyone will be able to report a breach of the code, and you’ll have to have a framework in place, dealing with how you will comply with the code, given the significance of the code.”

Radford said the proposed changes shouldn’t come as a shock. “Whist brokers performed well in the Royal Commission, generally, and weren’t a specific target, it would be crazy to not take the lessons and issues into account in any code review.”

If you are a registered delegate who has missed any of the sessions at the 2020 NIBA Virtual Convention, many of them are now available on demand on the convention website.