The chair of the Life Insurance and Advice Working Group (LIAWG), John Trowbridge, has rejected claims that he steered the findings of the group towards a particular model, stating his report was independent and did not reflect the views of insurers over advisers.
Trowbridge made the statement in response to a submission to the PJC Inquiry into Life Insurance written by Bombora Advice which claimed he changed the terms of reference for the LIAWG and did not produce an industry agreed response to ASIC Report 413.
In his response, also submitted to the PJC, Trowbridge rejected that he “…with FSC approval and despite AFA protests, changed the terms of reference before the Final Report was published, so it became a report of the Chair, no longer an industry agreed response”, as claimed in the Bombora submission.
Trowbridge denied that he or the FSC changed the terms of reference and said the LIAWG process was never intended to be ‘industry agreed response’ to Report 413 but was to be an ‘industry agreed process’ in supporting a review of life insurance, in which his independence was guaranteed.
“Neither I nor the FSC changed the terms of reference. Instead, the AFA, being dissatisfied with some of the recommendations in my final draft report, attempted to negotiate changes on the basis that the terms of reference required “an industry agreed response,” Trowbridge said.
“As noted above, this was not the basis of my review yet one of the AFA representatives on the LIAWG chose to make and publicise this allegation,” he added, pointing to the introduction to his report which stated that both the AFA and FSC had pledged that his role as chair was to act independently.
Trowbridge also rejected the claim the LIAWG process was confidential and its outcomes reflected the views of the FSC stating that all members of the working group were part of the process, were fully informed and involved in the process and had access to all those submissions made available to the whole working group.
He said submissions were only made public when individual respondents chose to make them public, and while the FSC had made its submission public there were many others which supported or mirrored the recommendations in the final report but were not released publicly.
Ronald Reagan once said that the most terrifying words in the English language are “I’m from the government and I’m here to help”. What Trowbridge did to our industry was essentially a hatchet job. A pre-conceived thought bubble with an agenda to be achieved for the large 4 banks, ISN and a life office via the FSC….their lobbyists. The IFA’s like you and I do not matter and for that matter neither does the consumer. Trowbridge is an outrage and lacking in any objectivity at all. The result called LIF for short is what we are to face. Our associations the AFA and FPA ought also hang their collective heads in shame. They though have a calve out for the promotion of education and expect us to merely”suck it up”. Take note AFA and FPA that for selling us out as your loyal members, you shall reap what you so. Many of us are disgusted and even for those financial advisers who provide holistic advice, yes even your business model and pricing is compromised. Who now would buy your business…. As for those risk only advisers, your model is severely compromised as you now need to convince consumers of the merits of fees for risk advice on top of a commission . How this industry survive all these years without LIF etc….oh yes, their was a time Common Sense was here. Sadly Common Sense has left the building with only Ignorance and Incompetence as his or her replacement.
Alistair, I concur strongly and thank you for each point you make – well stated and true in every sense. I would only be able to add that this Trollbridge creature should also hang his head in shame for enabling these changes which can potentially drive a wedge between advisers and their clients with these mandatory fees we will have to charge – which clients will NOT pay for risk only advice. Trollbridge has therefore initiated the end of our once great industry. he is either stupid or in the pockets of ‘someone’, perhaps we’ll never know. Not important now. The young risk advisers will need now to find a new career path and oldies like me (33 years protecting clients and 20 years still ‘in’ me!) will have to abandon long-time clients and the underinsurance problem and navigate our own retirements as soon as possible or at least prior 2020 when risk advcisers will be subject to irrelevant full financial planning exams that will not help us or clients one iota in placing appropriate insurance for clients in need. Well done Trollbridge – you should be ashamed of yourself. A sickening legacy you leave. Families unprotected will be on your head.
I have asked this now in the last two issues of Riskinfo and I will ask again – RiskInfo, run a poll asking advisers if they believe that the FSC has acted and does act in the best interests of consumers. Yes I know it may seem like the horse has bolted in regard to the LIF, but at the very least such a poll will reveal how advisers generally feel about this body.
So you say your report was independent, Trowbridge. I say BS to that!
The 200-odd files you “independently” reviewed that lead to Report #413, were handpicked and not randomly selected as a starting point. So that already discredits your review in my opinion.
Secondly, the adviser files you reviewed reflected less than 0.4% of the advisers in the industry. How could any review of any subject, anywhere in the world call that an accurate reflection of any subject matter? It’s laughable and should have been discredited by the media, the government and certainly the ‘so-called’ leaders in this industry. But ASIC, with its completely left-wing views now, unsurprisingly found nothing wrong with that.
Furthermore, you and your mate Peter Switzer ought to be ashamed of yourselves for the ridiculously misleading information you both aired on Foxtel SkyBusiness back on November 15th, 2015 where you spruked completely outrageous policy premium and upfront commission figures.
The average policy premium in Australia is $2,400 – yet you and Switzer thought it was perfectly fine to tell viewers about regular policy premiums of $10,000. Does that now mean that because a friend of mine drives a BMW, the rest of Australia does now too? Ripper, I’ll have a navy blue one then please!
On top of that, you also spoke of 120% upfront commission rates as though every life office offers that.
FACT #1 – that includes GST to begin with, which we pay the government, not pocket.
FACT #2 – Only 3 of the 11 insurers pay that level of upfront commission and of them, 2 offer it because they’re product offering is / was average at best and their premiums non-competitive so they had to throw the carrot out to advisers to write their business. Is that advisers fault? No, but you’ll say it is if we take it up.
Can’t stand looking at your smug, ‘paid for comment’ face any longer so that’s enough from me on this.
I hear you brother. Trollbridge should be ashamed. Can’t improve on your comments at all – very well stated. Comments like this need to be rammed down the throats of government pen pushers and life company execs alike, again and again – not that they don’t already know the true facts but choose not to let on.
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Incidentally, while I like your catchy name very much, I’d suggest you use your real name – it will give your comments much more credibility and power – please consider it seriously.
This is now a game of both logical and lexical semantics.
Under the heading, ” Independence of the Trowbridge Report” contained within the LIAWG Interim Report (“Trowbridge Report”), it clearly states:
” Mr. Trowbridge, the LIAWG’s independent chairman, has received extensive input from the AFA and the FSC and other stakeholders, with a view to assisting the industry to respond to the ASIC findings and, through an agreed process, to develop an
” INDUSTRY WIDE RESPONSE “.
The Terms of Reference of the LIAWG clearly state:
“The LIAWG will:
Provide a UNIFIED response to the identified issues”.
So, John Trowbridge is arguing that it was NEVER intended to be an “industry agreed response”, and yet the parameters governing the outcome refer to both an “industry wide response” and a “unified response” ?
The definition of unified relates to being the opposite of divided.
If the AFA (as an integral participant of the LIAWG) were dissatisfied with some of Trowbridge’s recommendations this clearly indicates there was DISUNITY within the LIAWG both prior to and following Trowbridge’s recommendations.
John Trowbridge may well have been provided the appointment of an independent chairman, but surely only operationally within the Terms of Reference governing the working group.
In a Money Management (April 16th, 2015) article titled “Trowbridge rejects mandate claims”, and in an extract from John Trowbridge’s own letter it states:
” Industry transformation is essential. It is FANCIFUL to expect that a SUITABLE CONSENSUS could have EVEN BEEN ATTEMPTED within the working group when it did not include stakeholders beyond the AFA and the FSC.”
If this was Trowbridge’s thinking from the very outset and he thought an industry wide and a unified response was never in fact achievable, it places into question the legitimacy of the whole process from commencement.
Thank you Craig – couldn’t say it better. Sadly, very sadly, I am now convinced the betrayal of risk advisers is complete and in stone – the life companies and special interest groups have all but succeeded. We all know fees only will simply not work for risk (unless life companies halve premiums!). The smart adviser will now be looking for greener fields or retirement. Yep, I know, that’s massively negative and I’ve always been a positive person but the way they’ve ALL gutted this risk industry has gutted me. I’m simply facing the reality of it now.
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Riskies cannot charge a fee on top of the premium – clients have shown many times they just won’t cop it regardless of value statements and the like. Halving commissions and doubling chargeback time is the writing on the wall that life companies+interest groups want REAL advisers OUT and cheaper robo-advisers IN. Please don’t shoot the messenger here but, after 33 years, after MUCH deliberation and analysis of what the forces are conspiring, of seeing it all, I can now see the future and it is one where risk clients are shafted by underwriting at claim time and sneaky marketing at application time. underinsurance will reign. Families will be devastated. Not for me, no more. I’m leaving the cesspool by 2020 max. The major players should be disgusted with themselves. Sorry for the negativity – I call it reality now and, of course, I do NOT want it to be this way. I’m over all the platitudes – there’s too many flying around and it is sickening.
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