New rules introduced by the Australian Securities and Investments Commission (ASIC) now require insurance brokers and financial advisers to obtain and document informed consent from clients before receiving commission payments tied to insurance product recommendations, reported Securitybrief.
Effective from 10 July 2025, the updated regulations mandate that Australian Financial Services (AFS) licensees and their representatives secure a client’s informed consent—either in writing or as a documented record of verbal consent—prior to accepting commissions for general, life, or consumer credit insurance products. While limited exemptions exist, the changes apply broadly to most retail client interactions involving insurance commissions.
In addition to securing client consent, insurance brokers and financial advisers are now required to provide comprehensive disclosures before receiving any commission. Under the new regulations, all disclosures and consents must be securely stored and remain easily accessible for a minimum of five years. Should there be any changes to commission arrangements or policy terms, fresh consent must be obtained to maintain compliance.
These requirements are expected to increase the compliance burden on those in the insurance and financial advice sectors, placing greater emphasis on timely, accurate, and secure record-keeping. Importantly, advisers must not only document verbal consent in writing but also provide a copy of this written record to the client.