The Federal Government has welcomed the release of the Trowbridge Report, according to a statement from Assistant Treasurer, Josh Frydenberg.
Mr Frydenberg said the Report made “…a significant and constructive contribution to improving the quality of advice and outcomes for consumers”.
In a statement coinciding with the release of the report, Mr Frydenberg said the Government would give close consideration to the issues as part of its response to the Financial System Inquiry (FSI). The FSI report recommended that the life insurance industry should adopt a level commission structure, to be implemented through legislation (see: Ban Upfront Commissions – FSI).
The Assistant Treasurer said the Government was currently consulting with industry and consumer groups on the FSI recommendations, and would consider the issues raised by the Trowbridge Report in this context.
However, he also noted that “…the Government’s consideration of its response to the FSI need not delay industry-led initiatives that may flow from the Trowbridge Report”.
Meanwhile, the Australian Securities and Investments Commission Deputy Chair, Peter Kell, has offered an initial response to the Report from the regulator.
“We certainly welcome the fact that the report, right up front, identifies a misalignment of interests between industry and consumers. It’s a key structural problem that needs to be addressed,” Mr Kell told attendees at last week’s Financial Services Council Life Insurance Conference.
“We also acknowledge that the report, quite importantly, recognises that while there is no single answer to the question of how do we lift the quality of advice, it does point out that unless the remuneration issue is confronted, we’re not going to get to where I think we all want to go.”
Mr Kell said the issues faced by the life insurance industry needed a collective response from insurers, licensees and advisers, in order to move forward.
“If the industry ultimately is incapable of a mature, collective response, if it’s incapable of implementing genuine collective reforms, these issues are not going to go away. ASIC is keen to play it’s role and support the reforms and proposals that are taken forward, as far as it can.”
