Trowbridge report – a positive step for the insurance industry

National accounting and financial advisory firm, William Buck, is in support of the recommendations outlined in the Trowbridge report regarding life insurance practices.

The report recommended that commissions be capped at 20 per cent and initial advice is a flat fee of $1200.

Sam Kitchen, Insurance Specialist for William Buck said, “The Trowbridge report is a step in the right direction for the insurance industry. The recommendations will ensure the consumer and advisor’s interests are more closely aligned with a focus on the client’s needs not product. Everyone will be on a level playing field.

“Upfront commissions have been an issue in the insurance industry for a long time as highlighted in both the Trowbridge report and in ASIC Report 413 which was issued last year.

He added, “If flat fees are to be introduced, the industry also needs to review the claims process. At present, clients can find themselves paying thousands of dollars to lawyers to process their claims which is significantly adding to their insurance costs. Additional consultation is needed in this area to determine a more effective fee structure that reduces the overall cost for clients.

“At William Buck we project manage the entire claims process for clients in a transparent and timely manner to ensure the end result is a positive one. This process can often be very stressful. Advice from a professional where the client’s interest comes first helps ease the burden during this difficult period. At present this service is not paid.”

The vast majority of insurance advisors currently receive an upfront commission between 100 and 130 per cent.

Sam added, “The consumer has always come first at William Buck. About five years ago, the company introduced an ongoing service model involving regular progress meetings with clients to ensure the client comes first in all of the decisions that are made. This structure has also helped William Buck create a more sustainable insurance business model that is not reliant on transactional sales.”

“The Trowbridge report provides an excellent platform for the industry to work from, however the management component of claims and the costs associated need more careful consideration,” Sam concluded.