Denial on 11th hour Trowbridge change
The intention to make the final report of the Life Insurance and Advice Working Group the sole work of its chairman, John Trowbridge, was flagged at the time of issuing its interim report in December.
Amid claims by a member of the working group that its mandate changed in its final weeks, the Financial Services Council (FSC) has pointed to a statement published at the beginning of the working group's interim report that the third step in the process would be to: "prepare a set of independent recommendations in a report for public release (scheduled for March 2015)".
A member of the working group nominated by the Association of Financial Advisers, Centrepoint Alliance managing director, John de Zwart, wrote to advisers before Easter claiming that the mandate for the working group had changed within its last weeks from one intended to deliver an industry-wide response to being simply a report by its chairman, John Trowbridge.
Furthermore, de Zwart's letter suggested that this occurred despite the objections of the Association of Financial Advisers (AFA) representatives.
The letter to advisers also suggested that some submissions filed by life insurance companies to the working group had remained private to the chairman, Mr Trowbridge, and that advisers should ask the insurers to reveal the substance of those submissions.
"The original mandate for the working group was to develop an industry wide response to ASIC's Life Insurance Report issued in October 2014, which identified high levels of poor advice," de Zwart's letter to advisers said.
"The working group sought submissions from stakeholder groups and approximately 130 were submitted in January and February. The quality of independent adviser submissions was excellent, reflecting positively on our sector and also identifying the often misunderstood and hidden behaviours of the institutions in encouraging replacement business."
"The working group's mandate changed in the week prior to the Final Report's release and became the Report of the Chair, representing his views and not a consensus view. Whilst the AFA representatives objected to this change in mandate, the FSC supported the change," de Zwart said.
His letter to members went on to say, "The Report now reflects the views of John Trowbridge and has many similarities in regards to adviser remuneration with the FSC's Life Insurance Sub Committee recommendations".
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