{"id":29126,"date":"2015-03-30T09:21:48","date_gmt":"2015-03-29T22:21:48","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=29126"},"modified":"2015-03-30T11:44:15","modified_gmt":"2015-03-30T00:44:15","slug":"trowbridge-remuneration-proposal-adviser-verdict","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2015\/03\/30\/trowbridge-remuneration-proposal-adviser-verdict\/","title":{"rendered":"Trowbridge Remuneration Proposal &#8211; Adviser Verdict"},"content":{"rendered":"<div id=\"polls-138\" class=\"wp-polls\">\n\t\t<div class=\"pollHeader\"><strong>Will the Trowbridge Reform Model remuneration proposal (level commissions supplemented by an Initial Advice Payment) sustain a viable advice practice?<\/strong><\/div><div id=\"polls-138-ans\" class=\"wp-polls-ans\"><ul class=\"wp-polls-ul\">\n\t\t<li>No <small>(87%)<\/small><div class=\"pollbar\" style=\"width: 87%\" title=\"No (87% | 860 Votes)\"><\/div><\/li>\n\t\t<li>Yes <small>(8%)<\/small><div class=\"pollbar\" style=\"width: 8%\" title=\"Yes (8% | 80 Votes)\"><\/div><\/li>\n\t\t<li>Not sure <small>(5%)<\/small><div class=\"pollbar\" style=\"width: 5%\" title=\"Not sure (5% | 50 Votes)\"><\/div><\/li>\n\t\t<\/ul><div style=\"text-align: center\"><\/div><\/div>\n\t\t<input type=\"hidden\" id=\"poll_138_nonce\" name=\"wp-polls-nonce\" value=\"ae11ac108d\" \/>\n<\/div>\n\n<p>Our latest poll asks advisers to consider whether John Trowbridge&#8217;s &#8216;Reform Model&#8217; proposal for future adviser remuneration is sustainable.<\/p>\n<p><!--more--><\/p>\n<figure id=\"attachment_28591\" aria-describedby=\"caption-attachment-28591\" style=\"width: 150px\" class=\"wp-caption alignright\"><a href=\"https:\/\/riskinfo.com.au\/news\/files\/2015\/02\/John-Trowbridge.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-28591\" alt=\"John Trowbridge, Independent Chair of the LIAWG\" src=\"https:\/\/riskinfo.com.au\/news\/files\/2015\/02\/John-Trowbridge.jpg\" width=\"150\" height=\"180\" \/><\/a><figcaption id=\"caption-attachment-28591\" class=\"wp-caption-text\">John Trowbridge, Independent Chair of the LIAWG<\/figcaption><\/figure>\n<p>This poll follows the release of the Trowbridge recommendations last week, which have generated an unprecedented level of response amongst the adviser community. The widespread and deeply-felt responses we have received so far have been in reaction to an entirely new life insurance industry model proposed by Mr Trowbridge, which he says is intended &#8220;&#8230; to place the consumer at the centre of what life insurers and advisers do.&#8221;<\/p>\n<p>Expressing his rationale in another way, Mr Trowbridge has said in his <a href=\"https:\/\/riskinfo.com.au\/news\/files\/2015\/03\/150326-Final-Report-Review-of-Retail-Life-Insurance-Advice-Final-Copy.pdf\" target=\"_blank\">Final Report<\/a> that his overarching goal in making these recommendations was to &#8220;&#8230; improve the alignment of interests across the life insurance value chain, from insurer to licensee to adviser to consumer.&#8221;<\/p>\n<p>While the Trowbridge recommendations span four broad areas of: adviser remuneration, licensee remuneration, quality of advice and insurer practices, the cornerstone of the recommendations, as stated by Mr Trowbridge, is his Reform Model adviser remuneration proposal.<\/p>\n<p>We&#8217;re asking you to reflect on whether a 20% flat commission, supplemented by a $1,200 Initial Advice Payment (paid by the insurer) will generate a viable platform for future advice practices; particularly risk-focussed advice businesses.<\/p>\n<p>The following points are taken from the Final Report and detail Mr Trowbridge&#8217;s Reform Model remuneration proposal:<\/p>\n<ul>\n<li>The level commission is a maximum of 20% of premiums<\/li>\n<li>The Initial Advice Payment (IAP) is paid by the insurer to the adviser on a per client basis (usually the insured life)<\/li>\n<li>The IAP is available to the adviser when a client first takes out a life insurance policy and then no more often than once every five years (the \u201cfive year rule\u201d)<\/li>\n<li>The IAP is a maximum of $1,200 or, for customers with annual premiums below $2,000, no more than 60% of the first year\u2019s premiums<\/li>\n<\/ul>\n<p>Further, to support the integrity of the Reform Model, it is recommended that:<\/p>\n<ul>\n<li>The IAP be available only on advised business (i.e. for personal advice only and not available for general advice, either through direct sales or other agency sales or through group life policies inside superannuation funds)<\/li>\n<li>Existing arrangements for retention periods (\u2018clawbacks\u2019) apply to commission on the first year\u2019s premium and to the IAP if there is one<\/li>\n<li>All commission or other payments from insurer to adviser be fully transparent to the client with the adviser disclosing clearly whether any insurer payments represent full, partial or nil commissions<\/li>\n<li>The adviser and client remain free to agree on fees for service that are additional to the insurance premium.<\/li>\n<\/ul>\n<p>Would this remuneration model work for you, given the circumstances of your advice practice? Would it work for some, but not others? Is it too much of a change to expect advisers to accept? What is your verdict?<\/p>\n<p>The feedback we have already received from the overwhelming level of responses to our initial news story on the Trowbridge recommendations (see: <a href=\"https:\/\/riskinfo.com.au\/news\/2015\/03\/26\/20-flat-commissions-trowbridge\/\">20% Flat Commissions &#8211; Trowbridge<\/a>) is telling us that the vast majority of advisers do not agree with Mr Trowbridge&#8217;s cornerstone recommendation. But here is your chance (or another chance) for you to have your say.<\/p>\n<p>We will report back to you on the outcome of this poll later this week, and we will also be reporting on all the other key issues stemming from this potentially landmark report.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Our latest poll asks advisers to consider whether John Trowbridge&#8217;s &#8216;Reform Model&#8217; proposal for future adviser remuneration is sustainable.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,49,270],"tags":[],"class_list":{"0":"post-29126","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-compliance-regulation","7":"category-polls","8":"category-remuneration"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/29126","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=29126"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/29126\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=29126"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=29126"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=29126"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}