A recent Roy Morgan survey found that the number of clients switching to industry funds on the recommendation of professional financial advisers plummeted significantly over 2013.
Porte Financial Services director Robert Porte said that he agreed with the results, saying there is often difficulty in ascertaining the asset composition of industry funds.
“To be brutal on this issue, under no circumstances would I recommend an industry fund to a client, unless specifically requested to do so,” Mr Porte said.
“These funds are often regarded as providing cheap risk insurances, but this is also reflected in comprehensiveness and definitions. You get what you pay for.”
Mr Porte also added that the proportion of industry fund members exiting to start up their own self-managed super funds (SMSFs) would increase as a result of these deficiencies.
“Recent product changes have been introduced to mimic some SMSF benefits,” Mr Porte said.
“However, this will not arrest the haemorrhage.”
Gurney Financial Services director Tarnia Gurney agreed that she has her own reservations in recommending industry funds due to a lack of clarity in benefit payouts.
However Paramount Wealth Management principal Wayne Leggett said that if an industry fund ticks all correct boxes in fitting for a client’s needs, than there is “no reason a financial adviser could not recommend an industry super fund.”
I back up Rick – it has taken 13 months to finalise a death claim for a single male with only his parents to claim the benefits. WHY! it took 10 months for a client to get extra life & TPD on his IFS. WHY? because the lack of service provided. these real cases nothing political about lack of service.
One major important point that has not yet been expressed is, how can we provide recommendations when the Industry funds don’t allow their funds to be externally rated by the research houses. This is the reason why I cannot rec any Ind fund because my PI insurer won’t cover me if I do.
Fred Smythe, great display of sycophantic naivety mixed with an inability to read and comprehend.
Wow! Some of the comments in response to this article show amazing political bias, ineptitude, and downright contempt for their clients’ best interests. How on earth do we build respect for the profession when these views are not only held, but openly expressed in public? How could one trust or respect the financial recommendation of people like this? Should they lose their licence?
I am required to (continue) to ACT IN MY CLIENTS BEST INTEREST, and I will NEVER recommend an administrator that:
1. doesn’t place value on professional advise
2. believes they are the final word in financial planning
3. believes they are ‘entitled’ irrespective of performance
4. has no respect/concern for their members when their members or their members beneficiaries when faced with claims
5. believes in non disclosure
6. believes in using undue political influence to enhance their position at the expense of members
7. believes in bad mouthing the profession to enhance their position at the expense of members
8. Is fraught with so many vested interests
9. and the list could go on and on…
As Mr Gurney points out, if the fund provides appropriate disclosure, assists the client and adviser and has appropriate fees and insurance, there is no problem. However ISN hastaken the combatative aproach and activly works against clients who turn to planners. What would they expect planners to do. This is not the Union/Labor Party dictatorship, ISN cant make the client do what they want. They gave it a good go, but look at the backlash from the voters. The Union movement was done no favors by the behavour of the previous Labor government. It put them all in a very bad light.
My lack of respect and faith in industry funds is based on too many experiences where the lack of empathy for a member in need or a member’s family in need has led to unreasonable delays in settling various claims. Too often, funds delay providing information required to provide quality advice and the employees act as if the money the hold on Trust belongs to them, not the members. When the Industry Funds start to provide the type of service the retail funds I deal with do, they will loose their competitive edge; but they have a ways to go.
What does the IFSN expect. Denigrate the great work of the vast majority of FPs for market share aided and abetted by the Labor party for years then expect our support. Get real!! Fortunately most of us aren’t that gullible or have that short a memory. I couldn’t care less if they tick every single box known to man/women I would walk 1000 miles barefoot over broken glass to find a non ISFN suitable alternative.