Informed Consent Changes
Informed Consent in Insurance Broking: What’s Changed and Why It Matters
As of 10 July 2025, a major shift has taken place in how insurance brokers operate in Australia. The Australian Securities & Investments Commission (ASIC) has introduced new informed consent obligations that directly affect how brokers disclose commissions and obtain client approval.
What Prompted the Change?
Historically, brokers disclosed commissions after a product was recommended. But ASIC’s new rules require brokers to seek client consent before receiving any commission, even if the product hasn’t been finalised. This change is designed to:
- Increase transparency
- Reduce conflicted remuneration
- Strengthen trust between brokers and clients
It’s part of a broader push to ensure clients understand not just the product, but how their broker is compensated and why that matters.
What Brokers Must Now Disclose
Before placing cover or receiving commission (ONLY IF ITS A RETAIL CLIENT, A RETAIL PRODUCT, AND PERSONAL ADVICE HAS BEEN GIVEN) , brokers must clearly explain:
- The name of the insurer (if known)
- The commission rate or range
- The frequency and duration of commission payments
- The services provided in relation to the product
- A statement that client consent is legally required
- A note that once given, consent cannot be withdrawn
This must be done in plain English, either in writing, verbally, or via a secure digital process, and documented for at least five years.
What This Means for Clients
For insurance broking clients, this change is empowering. It means:
- You’ll know upfront how your broker is paid
- You can make more informed decisions about your cover
- You’ll be protected from hidden incentives or biased advice
Consent Is Ongoing
This isn’t a one-time formality. Brokers must seek new consent each policy period if personal advice is provided and commission is paid. That includes renewals, changes in insurer, or updates to payment terms.
Why It’s a Good Thing
Informed consent isn’t just a compliance box, it’s a sign of a broker who values transparency and puts your interests first. It helps you:
- Understand the value of the advice you’re receiving
- Compare brokers more fairly
- Build a relationship based on trust, not assumptions
