Insurance Brokers: directory of firms

An AFS licence authorises a business and its representatives to provide financial services to clients. Providing financial product advice and dealing in a financial product are both covered, and arranging for a person to acquire a product is dealing unless it amounts to advice or is exempt.

Claims handling and settling is itself on ASIC's list of financial services, so the licence requirement reaches further into what brokers actually do day to day than the word broker suggests. A broker may hold its own licence or act as an authorised representative of one; both are legitimate, and both appear on ASIC's registers.

A broker starts by understanding the risk: what you own, what you do, what you are contractually obliged to insure, and what would actually hurt if it failed. That disclosure drives everything, and incomplete disclosure is the most common reason a claim later runs into trouble.

From there the broker approaches insurers, presents options, and places the cover. The value of the relationship usually shows up at two moments: at renewal, when the broker should be re-marketing rather than rolling over, and at claim time, when they advocate for you with the insurer. Ask at the outset what the broker does at each of those points.

Advice providers giving financial product advice to retail clients must give a Financial Services Guide or make website disclosure information available, give a general advice warning when giving general advice, and prepare a Statement of Advice when giving personal advice to a retail client.

Because general insurance is not a relevant financial product, the professional standards for financial advisers do not apply to a broker advising only on it. Regulatory Guide 146 minimum training standards continue to apply to people giving general advice and personal advice on general insurance, basic banking products and consumer credit insurance.

Brokers are typically paid a commission by the insurer, sometimes a fee by you, and sometimes both on the same policy. None of that is hidden if you ask: the Financial Services Guide is the document that sets out services, fees, commissions earned and links to product providers.

Where an adviser gives personal advice about insurance and will receive a commission for selling the product, they need your consent to receive it. That applies to life insurance, general insurance and consumer credit insurance. Ask what the commission is, how it differs between the insurers being quoted, and whether a fee-for-service option exists instead.

Buying direct is simplest for standard, well-understood risks. A comparison website can build a shortlist quickly, but Moneysmart notes that comparison sites are businesses, may make money through promoted links, and may not cover all your options.

A broker earns their place where the risk is unusual, where several policies have to fit together without gaps, or where a claim is likely to be contested. For straightforward personal cover, the Insurance Council's find an insurer service is a reasonable starting point for building your own shortlist.

AFCA can consider a complaint about an insurance broker's conduct in following instructions or arranging a policy, as well as complaints about an insurer's own decision or conduct. That distinction matters: if the cover was never placed as instructed, the complaint is about the broker, not the insurer.

AFCA is free to consumers and small businesses, and it is compulsory for licensed financial services providers to be members and to take part in the process. Start with the firm's internal complaints process, which the Financial Services Guide should describe, then escalate.