Brokers need formal qualifications and on-the-job training, inquiry finds

Formal education provides a solid foundation for professional practice but alone does not give staff the skills, knowledge and behaviours needed to provide services competently, according to an inquiry undertaken by the Insurance Brokers Code Compliance Committee (the Committee).

The inquiry found that staff needed to supplement their educational qualifications with on-the-job support and experience to develop the required competencies.

Organisations said detailed knowledge – of products, systems, specific industries and rules (including legislation and codes) – was an integral part of competency for insurance brokers. Such knowledge was gained through a combination of formal education, training and on-the-job experience.

Many organisations said they consider positive attitudes and behaviour, such as client focus, commitment to quality, respect and empathy, to be equally important as the knowledge and ability to undertake tasks.

The Committee undertook the inquiry to better understand how insurance brokers think about competency and achieve it within their organisations, given recent breaches of the Code’s training standards and the focus on professionalism in financial services.

The inquiry, Professionalism and competency in the insurance broking industry (http://www.fos.org.au/custom/files/docs/professionalism-and-competency-in-the-insurance-broking-industry-report.pdf ), found that insurance brokers typically understood competency as referring to a person’s skills, knowledge, attitudes, behaviours, qualifications and training.

The inquiry found that:
  • file audits, client feedback and claims outcomes are generally used to monitor staff competency
  • in 96% of organisations, all client-facing staff were qualified to advise on more complex Tier 1 products such as life insurance and sickness and accident insurance but about 1 in 20 organisations had some client-facing staff with neither Tier 1 nor Tier 2 qualifications.
The Committee’s consumer representative, Julia M Davis, said that with so much focus in 2018 on the Royal Commission into Misconduct in Financial Services now is an important time for insurance brokers to reflect on whether their services and advice are meeting community expectations. It is good to see that most Code subscribers are committed to maintaining professionalism and competency in their organisations, but there is always room to improve and strive for best practice.
 
The Committee’s independent Chair, Michael Gill, said the vast majority of Code subscribers demonstrated a commitment to professionalism through competency frameworks and staff training requirements, which often exceeded ASIC standards.
 
To maintain and further develop competency and professionalism and build client and community trust, he urged subscribers to:
  • incorporate the Code into their company structure and strategy
  • develop and communicate a common organisational understanding of competency focused on meeting client expectations
  • treat competency-based training as equally important as educational qualifications
  • train all staff in Code obligations.

Some 280 organisations responded to the inquiry’s multiple choice and open text questions, representing more than 15,000 staff in client-facing, management and support roles.

Further information:

Sally Davis
General Manager, Code Compliance & Monitoring
(on behalf of the Insurance Brokers Code Compliance Committee)
(03) 9613 7341
 
About the Insurance Brokers Code Compliance Committee

The Insurance Brokers Code Compliance Committee (the Committee) is an independent body responsible for monitoring Code subscribers’ compliance with standards of good industry practice in the Insurance Brokers Code of Practice. The 303 subscribing insurance brokers have agreed to follow these standards and committed to acting fairly, ethically and reasonably when providing services to current and prospective clients. The Committee aims to help the industry provide services that meet the needs and expectations of consumers.

IMPORTANT The contents of this email (including any attachments) are confidential and may contain privileged information. Any unauthorised use of the contents is expressly prohibited. If you have received this email in error, please notify us immediately by Telephone: 1800 367 287 (local call) or by email and then destroy the email and any attachments or documents. Our privacy policy is available on our website.