Mr Trapnell said the interim report released yesterday appears to suggest reintroducing a three- to five-year “responsibility period” for advisers “cloaked in the guise” of a loan from insurers to advisers.
“In reality this is a three- to five-year commission responsibility period that was removed from our industry due to competitive pressures in the 1980s,” Mr Trapnell said.
“In my opinion, for insurance companies to now attempt to reintroduce a long responsibility period, without the market levelling effect of competition, is in its nature price-fixing.
“It is completely inappropriate to attempt to move responsibility away from product manufacturers and on to advisers in this way.”
The interim report has brought forward several ideas for industry discussion, including five possible commission-based remuneration models for advisers.
The dealer group boss pointed out that in the case of adviser remuneration, trailing commissions are a “completely acceptable” form of revenue.
“The trailing commissions a life adviser receives are actually renewal commissions, paid to keep polices on the books,” he said.
“The renewal commissions advisers receive on a whole number of policies compensate them for the time and effort they put into helping an individual client when they genuinely need it most – at claims time,” he said.
Overall Mr Trapnell said the report is both unsurprising and “disappointing”.
“Regrettably, I believe the interim report fails to adequately take into consideration the honest hard work and effort risk advisers around Australia undertake,” he said.
[quote name=”Matthew”]Dear Mr Trapnell go back to the eighties where you belong.[/quote]
Matthew, can you explain what your reason is for this comment? I don’t understand your point…
Dear Mr Trapnell go back to the eighties where you belong.
Don raises some good points. The AFA are encouraging advisers, practice owners and licensees to make submissions to the Working Group in response to the Interim Trowbridge Report. Submissions that offer evidence, reason, logic and solutions will be very important and valuable to Mr Trowbridge in forming his final recommendations. The AFA is involved to represent advisers.
I ask that you be part of helping the process get to the right outcomes by making a submission. It doesn’t have to be long, just supported by reasoning. Having recently been an adviser, I understand the emotions around this issue – that’s why its important you have your voice heard by the right people. I know it takes time and most advisers are short of that – but this is important.
(PART 2)
The product we sell is not a loaf of bread, a car or a fridge that’s a simple one off transaction; it’s an ongoing process where 1 party receives a service
and the other party is paid to provide that service, be it a review (which requires the use of software that advisers pay for), regular administration amendments and of course the most important service of all – helping a client through a claim which is also likely to be that persons most tragic situation.
Please tell me what other profession in this world provides this service for no fee or even the ridiculous fees now being suggested by regulators and outsiders who just don’t understand the full complexity of an adviser’s role?
Be careful what you wish for regulators because what you’re proposing will have dire consequences for the industry and everyday Australians.
Thank God Don Trapnell stands up for advisers and who the hell are these people passing judgement and what advisers get paid for the work we do for our clients each day?
Apparently my AFA does not agree with you Don
Wonder what I get for my membership fees other than a glossy mag full of industry ads and articles from people who are NOT ADVISERS