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Life insurance reforms ‘long-overdue’: Adviser Ratings

Adviser Ratings has welcomed the recommendations handed down by LIAWG independent chairman John Trowbridge to reform the life insurance industry.

In a statement following the release of Mr Trowbridge's report, Adviser Ratings spokesperson Christopher Zinn said the reforms proposed by Mr Trowbridge were “balanced, considered and long-overdue”.

“Consumers have known for years that life insurance, though an essential financial service, was seemingly run for the benefit of the industry and advisers through cosy commissions,” Mr Zinn said.

“Capping upfront commissions in a way which ensures we can get transparent access to the [appropriate] kind of policies and advice, satisfying our best interests as consumers, is surely paramount,” he said.

Adviser Ratings also pointed out that it is “ironic” that the sales-driven culture from the early days of life insurance helped the conflicted remuneration business models “evolve”, damaging the wider financial advice sector.

“Life insurance, for reasons the public never understood, was carved out of the Future of Financial Advice (FOFA) reforms,” Mr Zinn said.

“Now is the chance, while FOFA is becalmed politically, to show how industry can reform its own house,” he said.