The independent and important report was commissioned by the Financial Services Council and the Association of Financial Advisers on behalf of the industry.
It follows the ASIC Review of Retail Life Insurance Advice of October 2014 which criticised the quality of advice and misaligned financial incentives.
Mr Trowbridge’s report makes a significant and constructive contribution to improving the quality of advice and outcomes for consumers.
The Government is giving close consideration to these issues in the course of responding to the Financial System Inquiry (FSI), which included a recommendation that a level commission structure for life insurance be implemented through legislation.
The Government is currently consulting with industry and consumer groups on the FSI recommendations, and will consider the issues raised by the Trowbridge Report in this context.
The Government’s consideration of its response to the FSI need not delay industry-led initiatives that may flow from the Trowbridge Report.
Josh Frydenberg is federal MP for Kooyong and Assistant Treasurer
and Solicitors and Lawyers will get even richer by blocking up our whole legal system.
Maybe the “consultation process” was with the “yes men” and not with real advisers. Maybe the top end of town and insurers are the only ones with a loud voice. Maybe the FPA and similar are too weak in their mindset that risk advisers dont rate. Maybe we need to throw out the boards of our “representative organisations” and find real advisers who understand the industry and who want to make a difference to our clients lives (positive) to stock the boards. Maybe we need something akin to a revolution. Reg, you are a hard worker and care…..authors of reports have no idea of coalface workers as they have left that behind somewhere after feeling important with academic qualifications which of course make them “professional” but somehow not wise. How to change this? each of us must decide to act and voice opinion to our representative bodies loudly and also to federal and state MP’s. Agitation works only when there is enough of it. Just whinging doesnt achieve a thing.
Its the insurers that are driving this… of course they are all singing from the same hymm sheet! Independant report my arse! it would be easier if advisers just fell of the face of the earth and let the insurers deal directly with the public (our clients) or better still give them to the industry Super funds.
Well said Reg….. I think we all know who is driving this. The insurers becuase they have created an unsustainable environment apparently because advisers are all crooks and change everyone’s policy on renewal.
Mr Trobridge please join me for a week reviewing Rural and city clients from Toowoomba to Longreach. I will have you use your magical number of 20% income from the renewal income I receive and hopefully after about 3,000 klm’s there may be some new business income. For myself you will allow me to receive the income that you received for providing the “Trobridge Report”. I know who will be in the cheap and nasty budget motels, as I know I will be able to stay in top class. You will have very early mornings. Monday depart Toowoomba at Sparrow Fart (4am), have 2 appointments along the way then arriving in Longreach around 10-11pm. Leave next morning’ dingoes brekky, head out at 4am again and back in town following 3 appointments at around 8-9pm with every day a similar time frame. Most likely arrive home sometime saturday. I think you will be as mad as a cut snake at the end of it but I know I will have more than a few quid left in my pocket. Have you made a disclosure to all and sundry how much you got for this wonerful work.
These clients could not care how much I may earn at 100% commission. You seem to be the only one. Have you had a bad experience with a Financial Planner. You can tell me all about it during the many hours we will be in the car. It will be a fantastic trip where you will meet some real fair dinkum Australians, you will experience why they like to see me and that they know the work that I do keeps their enterprises financially safe for the next generation. We will also visit 3 large Trauma claimants who will tell you of the good work I do. Oh by the way don’t bother to wear a tie. Also get rigged up with RM Williams gear I don’t want you to feel like a fish outa water.
I spoke to a BDM at TAL Life about this yesterday and was absolutely taken aback (and angered) by his acceptance that advisers need to accept this is the way its going to be, moving forward. Imagine telling someone on that side of the fence they that they’re going to cop an 80% drop in THEIR income what the response would be?
I am gobsmacked – to be honest – we should be doing every thing we can to help the adviser increase the reach of insurance to the wider population –
what do they say in the Military – friendly fire is always more accurate than enemy fire.
On the one had we have a five page dissertation from the review on advice for insurance on what an adviser must to to ensure a retail client is properly advised – then we will remunerate him for 4 hrs work – I dream of a client that takes four hours work – its beginning to sound like ivory castles all over again.
I predict that
1.Advisers will leave the Industry
2.Banks will take over selling their own products
3.People will be left uninsured
4.At claim time Advisers will not able to put the time into assisting the client
5.Life coys will sell less products, and downgrade benefits
6.Centrelink will be rushed for help when people die, leaving their family in financial distress.
7.Will not stop the very small amount of bad advice, rogues will fine a way around it
8.Unemployment will jump
9.Will have across the whole economy knock-on effects
10.Socialism will thrive, taking money from savers to give to the sufferers.
Regards, Peter A Reid Expert Witness – Life Insurance
I suggest speechless may be appropriate.
The solution presented , in an industry drowning in complexity – is yet again convoluted , impractical and demonstrates a total ignorance of the personal insurance process. Why is it purely the remuneration as a focus. The actual process of obtaining personal insurance can take months to complete. Insurance underwriting processes are hardly leading edge efficiencies. The entire sector requires review not simply advice.
I do wonder what would happen to all these great ideas if they were put back on the management structures in our large financial institutions. Bonuses capped at 20% of salary. Salary capped to industry benchmark levels for specific roles. Claw back for cost inefficiencies, dumb idea implementation and failure to meet specific targets.
Total transparency on salary package. Given it is these same individuals guiding adviser remuneration and for employee planners – those advisers sales targets – why have the senior executive remained off target.
The simple irrevocable fact is – Insurance is not bought
Insurance offsets other great social costs – that of not being insured and leaving the cost to the community.
If personal insurance was mandatory then yes , cap and control.
Until then this process is simply enhancing the prospect of an underinsured nation and the broader community left to carry the cost of those that do not want to pay.
I think any new adviser coming into the industry will now reconsider due to cash flow restraints. The need for cash flow in any business is import. I fully support a move to hybrid. Has there been any consideration at all about the waived fee to the client should commission be paid. This is only going to cost the client more due to increase in cost and the fee for services cost now is unable to be waived.
I’m just staggered by the lack of commentary on this report by other advisers so far today. Has everyone just accepted this is the way its going to be now or are advisers so shocked by the recommendations, they’re speechless???