In a statement issued on Friday, the bank’s group executive for wealth management, Annabel Spring, backed the Life Insurance and Advice Working Group (LIAWG) report’s recommendation to establish a new code of conduct for insurers and mandate broad approved product lists for licensees.
“It is critical that the life insurance and financial advice industries work to implement sustainable remuneration structures,” Ms Spring said.
“A life insurance industry code of practice which binds insurers, licensees and advisers will both improve outcomes for customers and the efficiency of the industry.
“We believe advisers need a choice of insurers and products in the provision of advice to provide a range of options to meet the best interests of all customers.”
While it supports “the intent of the report” the bank will now be assessing the impact of the recommendations on its various stakeholders, including customers and affiliated advisers.
The comments come as the AFA, an LIAWG co-founder, has expressed “caution” over the report’s recommendations, publicly stating that the association cannot offer “complete support”.
Meanwhile, Madison Financial Group general manager Giulio Russo told ifa he expects an exodus of risk-only advisers should the report’s proposals be implemented, while former AFA president Michael Nowak has warned there would be a significant negative impact on non-aligned advice businesses.
Has Mrs Spring been running the joint (CBA FP) for the last couple of years? If so question the level of creditability on such things as her ability to comment on ‘industry reform’. Albeit, agree reforms would seem to play into hands of the very vertically integrated! The AFA, prior to the release of the report, where heard roostering with regards to their involvement and absence of the FPA, must have been looking for their own Oswald (aka Trowbirdge)over the weekend ie did it all on his own ! Fancy sponsoring a peace of work that goes to undermined your very own paying constituency (insert old life agent). Next we’ll see Martin Ferguson renounce the union movement and run as a Liberal !!
Edward, the Trowbridge recommendations won’t just save the insurers commission payments, it will save them much, much more in claim payments. By making insurance advice less affordable and convenient, it will lead to consumers buying dodgy direct products riddled with fine print exclusions. It astonishes me that consumer groups aren’t up in arms over this.
You’ll find that most insurers will support the remuneration restructure recommendation because it will eliminate their competition (IFAs and risk only advisers) and save them millions in commission payments. After the legislation takes place you’ll the banks will invest tens-of-millions into advertising to capture the market left behind by the IFA’s then they will make large donations to the relevant political parties to keep watch over their backs as they dominate the market with little or no competition! Then 5 years later we’ll all be back to square 1 with ASIC wondering why the big banks control 99% of the risk and wealth management business thus ending up on the same road they tried to avoid for the past 15 years!
I’m not surprised that the CBA is the first to support the recommendations. If independent advisers go out of business, that will drive many more consumers into the banks for advice. After all, who else would recommend their crappy insurance policies?
Annabel Spring …. Never heard of her , has she ever sold a life policy? , has she ever been self employed ? Has she ever run her own business? Has she ever paid a claim? In fact has she ever done anything that would give her some idea of how a practice works and why the current status quo works
How should we be surprised that the Comm Bank are all for the Trowbridge report!If these recommendations, you bet they’ll be negative impact! I’ll also bet the banks have got it covered though!
Of course, banks will welcome the Trowbridge Report!
The Report’s recommendations are likely to see many independent risk advisers exiting the industry, thus removing an irritating source of competition to the banks which provide such exemplary services to consumers in the financial advice space.