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“Shouldn’t advisers advise?”

Terry and Paul had been loyal clients of their insurance adviser for more than 10 years. When they had switched life insurance policies previously they had been notified every step of the way by their adviser.

In December 2014, a new adviser from the same company contacted Terry and Paul advising of the benefits of switching insurance company providers and policies. In essence, the switch was for a ‘better deal.’

Within the ‘Insurance Review’ document there was a section which contained ‘next steps.’ The next steps required Terry and Paul to complete and sign the provided policy, and also said:

providing the terms offered by the new insurer are favourable and you are happy to proceed you should cancel your existing cover once the new insurance cover has been issued.

After a phone interview with the new adviser and, having been provided the relevant policy information, they agreed to change. Terry and Paul completed the relevant paperwork and returned it before Christmas.

The new cover didn’t come into effect until the end of January 2015.

In April 2017 Terry and Paul realised that they had been paying premiums for two insurance policies of a similar nature since January 2015. 

Terry and Paul’s view

Terry and Paul believed that their insurance adviser should have reminded them to cancel their existing cover when the new policy came into force, which was a month and a half after the ‘insurance review” document that contained the next steps was issued.

They had been long term clients and placed a lot of ‘faith and trust’ in their advisers. Terry and Paul believed the advisory company should have sent them a reminder notification regarding the need to cancel the existing cover once the new cover was in place.  

It was clear to Terry and Paul that they couldn’t cancel their existing policy straight away because their new policy was yet to be accepted. Terry and Paul said, at the end of January 2015, when they were notified that their new policy had been approved, they didn’t receive any notice to cancel their existing cover. They had never cancelled insurance before and believed the adviser should have ensured this occurred in the correct manner.

Terry and Paul believed that the adviser should repay their ‘unnecessary’ premiums from Feb 2015 to April 2017 ($5,379.85.) Because the premiums for the old and new insurance policies came out of their account at different times of the month, they didn’t realise they were ‘doubling up.’

Terry said that she had spoken to an adviser from the same company who said it was normal practice to assist clients in the cancellation of their policies.

Insurance adviser’s view

The initial adviser who had dealt with the change of policies had left the company by the time of this complaint. The advisory company maintained it was general practice to only give notice to cancel in the ‘insurance review’ document and stated it was not reasonable to expect an advisory company to notify the client of the need to cancel. It was up to each individual adviser to decide whether to take this extra step.

The advisory company confirmed that they only provided one piece of information telling clients to cancel their existing policy. This was contained in the ‘insurance review’ document and was issued more than one month before the new insurance cover was in place.

The company declined to reimburse Terry and Paul for any of the extra premiums paid and Terry and Paul then complained to FSCL.


To assist us in determining this case, we consulted an industry expert with over 40 years’ experience to determine what best practice in the industry was.

After considering the expert advice, we found that the advisory company was responsible for the administration of the initial adviser’s clients irrespective of whether he was still with the firm or not.

We decided that that both parties were, to some extent, at fault. The advisers should have made more of an effort to notify Terry and Paul that they were paying premiums for two policies. Furthermore, the adviser would have received at least two (annual) insurance reviews from each insurer relating to Terry and Paul. These should have highlighted to the adviser that Terry and Paul were paying double premiums.

Terry and Paul, however, would have seen both insurance companies’ names appear on their bank statements over the last 2 years and could have at least enquired as to why they were paying two premiums (monthly) with their advisory company.


We determined that both parties were equally responsible for the continued payments of two insurance premiums and negotiated a settlement between the parties under which the advisory company paid compensation equivalent to half of the premiums which Terry and Paul paid for the old policy over that time.