Licensees and insurers should take responsibility for implementing change in the life insurance advice industry, LIAWG chair John Trowbridge has said, following the release of his monumental report.
Yesterday, Mr Trowbridge handed down a report recommending a flat commission not exceeding 20 per cent be introduced for advisers providing life insurance advice, amid a range of proposals.
The report sparked outrage from many in the advice community, with the AFA – despite being instrumental in the LIAWG’s establishment – issuing a thinly-veiled criticism of the report’s recommendation regarding flat commissions.
Speaking to ifa, Madison Financial Group general manager Giulio Russo said he anticipates a number of risk-focused advisers to exit the industry, while former AFA president Michael Nowak forecast that fewer independent advisers and licensees would remain in operation.
However, while Mr Trowbridge made clear at a press conference yesterday that he stands by his recommendations, including those around adviser remuneration, he also said he feels for advisers as the victims of a conflicted system.
“Advisers have a right to feel persecuted in a way because they have been criticised up and down the country, across the political spectrum, by consumer groups, by regulators and yet they are probably one part of the chain here and they individually can’t do a lot about this without licensees and the insurers playing a big part,” he said.
“Most of the advisers are ethical people, they are conscientious people, they believe in the noble cause…but they are in an environment that is not of their own making.
“They have made the best of it as it is and they now have to make the best of a different environment in the future and I want to see the licensees and the insurers take a lead in dealing with these issues,” Mr Trowbridge said.
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