Advisers must review and respond to the Trowbridge Interim Report on life insurance advice before it’s too late, one licensee boss has warned.
Bombora Advice Managing Director, Wayne Handley, said he had spoken with a number of advisers since the Interim Report was handed down, and was surprised to learn that many were unaware of its existence, or the looming submission deadline.
The interim report, issued by John Trowbridge, represents the initial thoughts of the Life Insurance Advice Working Group (LIAWG), a joint initiative of the Financial Services Council and the Association of Financial Advisers. Among the observations included in the report is an acknowledgement that the industry must move on from its current commission model (see: High Upfront Commissions to Go).
Mr Handley said that it is in the best interest of advisers to take the opportunity provided by Trowbridge and ensure that they submit appropriate constructive commentary to ensure the future of the advice sector reflects their first-hand experience in directly servicing the needs of Australian consumers.
The nuances and dynamics of providing risk advice are often not clearly understood
“The time has now come for practitioners to have their say and provide balanced views that are essential at a time like this,” Mr Handley said.
“Advisers have an intimate understanding of consumers as they are ones that deal directly with them on a personal level through the delivery of professional advice.
“In addition, they are the ones managing the claims and other related issues – and in doing so, they have much insight and experience to contribute.”
Mr Handley highlighted the short time frame the industry had been given to respond to the Interim Report, expressing his concern that many stakeholders would miss out on an important opportunity to have their voices heard. Submissions close on 30 January, despite the report only being released on 17 December.
“An opportunity to provide a balanced and considered perspective and insight into the provision of financial advice should never be taken lightly or ignored,” Mr Handley said.
He confirmed Bombora would be submitting a response, responding to all aspects of the report, with particular reference to:
- Competency standards
- The cost of delivering advice
- Claims management
- Best interests responsibilities
- The UK experience
The Bombora submission will also draw attention to the time, effort, resources and energy afforded by practices in pursuing cover for clients that never eventuate for a multitude of reasons.
“The nuances and dynamics of providing risk advice are often not clearly understood and it’s our task and responsibility as practitioners to change this,” he concluded.
To view the Trowbridge Interim Report, click here. Submissions close on 30 January 2015.
You can also have your say by contributing to our current poll which seeks to determine which of the five remuneration models proposed in the report is advisers’ most preferred.
Where are the Insurance Companies?? Do they want to disappear or get swallowed up by the Banks? History (34 years in my case) clearly show that the one and the only successful distribution network for good quality, needs based, sustainable, profitable insurance advice is provided by “”Independent”” Adviser / Practitioners. We run our own Business models and fund them accordingly. We are NOT employees, we are small Business that employs a fair number of Australians (that all work in Australia and pay tax to the ATO). If the objective of the Regulators is to drag us back into the Draconian past of “Sole Agencies” and “product” sales employees then they are heading in the right direction by dictating how we are remunerated for the SERVICE we provide to our clients and the wider community.
I am yet to be asked by a client on claim or a widow / widower / beneficiary when the policy proceeds are paid to them as to how much I got paid when I provided the initial advice.
Excuse me for asking Mr Trowbridge but, how much do you get paid and what other benefits and perks are you “entitled to” and, what are your qualifications that provide you with the Power to sit in Judgement of how we are remunerated for the magnificent job we do Insuring Australians against poverty and hardship in the event of disability or death??
Also Mr Trowbridge, if you were keenly interested in getting the best outcome for all concerned may I suggest you give us a wider window of opportunity than the 29 possible working days from the 17th December to 30th January. I’m sure most people in Australia would have been on Christmas holidays and will have only been back to their offices for less than two weeks and are expected to make written submissions by 30th January and most will not have even heard about it yet.
At the end of all this whenever that may be?? And the Bank aligned insurance companies have had they needs attended to,!!! we are paid less {as we get to much apparentyl} employees are “let go” as we can no longer afford to keep them Will the consumer end up any better off ? Will the insurance companies assist with lowering premiums as costs are now 20% less or more with some companies ? { 80% max upfront on the table}. I dont think so? The cosumer is not the real issue here it is the “bottom line” or proft margin that the banks WANT. What was it last half year 6 Billion plus in the Commonwealths case and the rest were not far behind. It appears that there is never enough and we the advisers will pay for it and the consumer will suffer for it.Premiums will continue to rise proper and effective advice will taper off in favour of a phone call to some distant country where someone will give you a price and thats that!! We have no control and have not for some time and we are loosing more everyday.
No i dont have an answer “GREED” IS THE ISSUE HERE dont let them tell you anything else.
I use all remuneration models for different situations.
if I were to have a preference it would be level.
I just wish we as a group, could maintain a high standard of ethic when placing insurance on peoples lives and not at all on the remuneration received.
Ian, I think you will find that is a reasonably small number of advisers who dont have “a high standard of ethic”. The insurance companies (banks mainly nowdays) know who the serial churners are and do nothing, prefering to blame ALL advisers, and so create the lie it is indemic.
You have the choice of commission structure and that is how it should be. Many advisers require upfront for the first several years until they gain traction. They too should have that choice.
The lack of ethics lies with the serial churners AND the nsurance companies who are demonising ALL advisers.
When it comes to “policing” the Churners of risk business in our Industry, it is the Dealer Groups themselves that know full well who these people are. The Dealer Groups in some instances (it would seem to me) that fail to take appropriate action toward the “dubious” activity of such advisers and yet profess to aspire to “Best Practice” ideology. Insurance companies have been known to refuse to accept applications from certain “advisers” based on the adviser’s lack of business ethics. Dealer Groups have a “business decision” to make when it comes to “professional Conduct” of their Authorised Reps and sadly is most often based on revenue income only.
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