Trowbridge defends his mandate
The chairman of the Life Insurance Advice Working Group, John Trowbridge, has denied claims by a working group member that its mandate changed in the final weeks allowing him to be the sole author of the final report.
In a letter to Money Management, Trowbridge said the claims contained in an e-mail to advisers signed off by Centrepoint Alliance chief executive, John de Zwart, were wrong and "seem[s] designed to promote vested interests in the advice sector".
"If this is so, industry reform will be at stake," Trowbridge said in his letter. "And the stakes are high. If the industry fails to take a leadership position in response to my recommendations and stakeholders continue to promote their own interests ahead of consumers, they will leave no option but for the government and regulators to step in and fix the issues for them."
The following represents the full text of Trowbridge's letter:
The claim by John de Zwart that the mandate of the Life Insurance Advice Working Group changed in the week prior to the release of my final report, quoted in MM "Denial on 11th hour Trowbridge change" 7/4/2015 is not right.
This claim was one of several made about the processes involved in the Trowbridge Report in an email circulated by John de Zwart of Centrepoint Alliance, who was a member of the Working Group. I wish to set the record straight as the email contains some inaccuracies.
Critically, it fails to recognise the integrity and importance of my role as independent chairman in responding, at the request of the AFA and the FSC, to the life insurance advice issues raised in ASIC's report last year.
The Working Group was set up as a private sector inquiry based on the same principles as government sector inquiries. As such it was unprecedented and the magnitude of what was involved should not be underestimated.
Industry transformation is essential. It is fanciful to expect that a suitable consensus could have been achieved or should have even been attempted within the Working Group when it did not include stakeholders beyond the AFA and the FSC.
The role of the Working Group was to provide a forum to explore issues amongst experienced industry professionals and to provide expert information and other input to assist me to understand the issues fully.
My independence mandate was maintained from the outset and clearly declared by the AFA and the FSC in their foreword to my Interim Report in December. There were no eleventh hour changes as John de Zwart has suggested. Vested interests had to be neutralised and my independence assured that.
So there was never any agreement that the report would contain a consensus view. It was always going to be my view informed by submissions and input from insurers, advisers, adviser groups, consumer representatives, regulators and others. That was clear in the Interim Report and nothing has changed since.
Hence the Trowbridge Report does, and was always, going to contain my recommendations on how the life insurance and advice sectors can fix the structural issues that have prevented them from focusing on consumers first.
While my recommendations include some elements from many submissions, there is no single submission that substantially captures the recommendations. That is because they constitute a synthesis of selected ideas put forward in different submissions and also include some judgments on my part. The opportunity to receive 137 submissions and to draw on them this way is a triumph of the submission process and it demonstrates the breadth and substance of the submissions received.
It is notable that the consumer groups published their submission but most others did not.
John de Zwart's email seems designed to promote vested interests in the advice sector. If this is so, industry reform will be at stake. And the stakes are high. If the industry fails to take a leadership position in response to my recommendations and stakeholders continue to promote their own interests ahead of consumers, they will leave no option but for the government and regulators to step in and fix the issues for them.
John Trowbridge
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