POWERED BY MOMENTUM MEDIA
AusSuper deal creating questions
A trial arrangement between industry fund giant AustralianSuper and several financial planning dealer groups could lead to questions about the way advice services are structured.
Association of Superannuation Funds of Australia (ASFA) chief executive Pauline Vamos said the arrangement could lead to a further division between the level of general and intra-fund advice that funds provide that is covered by administration fees and full holistic advice.
Vamos said that the question for AustralianSuper and any other funds that enter this type of arrangement will be: will they pay for single-issue scaled advice, or will they offer it themselves? But the panel arrangement still represents the next step in the maturity of how super funds provide access to advice for members, she added.
Not appearing on Approved Product Lists (APLs) has been a big issue for industry funds, but with greater transparency provided by reporting and ratings agencies there is improved visibility of these funds. As such, planning groups are more confident about placing industry funds on their APLs, she said.
If further deals of this type eventuate, the stringent requirements AustralianSuper placed on the dealer groups (which include Matrix Planning Solutions and Godfrey Pembroke) would be copied by other funds, which already happens with associated financial planning groups, Vamos said.
Money Management understands these requirements to include: that the dealer groups must operate strictly under a fee-for-service payment structure; have suitably qualified advisers; and have a robust compliance and audit process.
Matrix managing director Rick Di Cristoforo said industry funds did have a place within the overall industry framework, and could be an efficient super platform for a range of clients.
“The industry has been focused on commissions and fees for too long, and ‘industry funds versus advisers’ has been overdone,” he said.
AustralianSuper and Matrix have been looking to break down that wall and take things purely from an advice, platform and product perspective, he added.
Godfrey Pembroke managing director Tom Reddacliffe said that he was not interested in the so-called ‘war’ between industry funds and advisers, and that anything that led to more clients receiving quality advice was a positive thing.
Association of Financial Advisers chief executive Richard Klipin said that financially it made sense for industry funds to leverage a retail planning firm’s resources and experience rather than go to the expense of setting up an in-house planning arm. This trial will likely be a forerunner to a lot more collaboration across the market, he added.
Di Cristoforo said Matrix would look at a similar proposal from another industry fund if it came up, but questioned whether another fund would be likely to enter the mix now when they haven’t previously. Reddacliffe said Godfrey Pembroke was not in discussions with any other funds at this time.
Recommended for you
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
