Speaking at the AIOFP’s offshore conference in Shanghai yesterday, former Local Super chief executive and Mercer consultant Nic Szuster said that while advisers have historically viewed industry funds as “competition”, a more co-operative relationship between the sectors is emerging.
Mr Szuster – who has joined the AIOFP staff to drive its industry fund co-operation strategy – said many industry fund boards have turned their backs on the traditional “embedded” model in favour of referral partnerships with existing advice networks.
“This model is losing traction because the industry funds are saying they don’t have full control over them and they are sort of a ‘halfway house’ – they’re not quite sure how to go with that model,” he said.
“The model that is getting the most traction is the referral model.”
Singling out the recent referral deals between Cbus and the FPA, and First Super and Infocus, Mr Szuster said industry funds are looking for trusted partners and that non-institutional financial advice businesses are in a more advantageous position.
“We are living in exciting times for the industry and for the association,” he said.
“If you read media reports, there is this whole push towards the non-aligned and independent practices. There is a buzz around non-conflicted advice and organisations that don’t have any sort of connections with the institutions.”
Asked whether the best interest duty could be a sticking point where a recommendation to exit an industry fund is made, Mr Szuster said FOFA’s remuneration reform has watered down this potential hurdle for referral arrangements.
“Advisers will act in their clients’ best interests and that would include advising to take members out of the fund. However, with a move to fee for service, the incentive for an adviser to move a member out of one fund and into another is diminished,” he said.
The AIOFP is currently in discussions with a number of funds attracted to the lobby group’s non-institutional structure and Certified Financial Strategist (CFS) adviser program.
Industry funds would be required to go through the AIOFP’s Filtered Research Committee accreditation process before deals are formalised.
Investor 23…. I’m not so sure many people or advisers know too much about your chosen course. No qualification at that level makes anyone more or less likely to be a product flogger. Without to much looking I’m confident I could find someone who did the same course as you fit your disparaging description and reference to CFP. If your looking for a point of difference I wouldn’t be relying on that qualification to do it for you.
CFP, FChFP, CFS, CFA, CA, CPA… Emeritos Professor?
Education… study and more study. It doesn’t address the sales culture and conflicts of interest that exist in the industry!
Bear in mind that non payment of the (on-going) membership fee equates to loss of your entitlement to use the post nominal designation!
I have personally chose to study the Fellow Chartered Practitioner course through AFA rather than CFP through FPA… Might do CFP later but as others have mentioned I would need to do a pretty intensive course to get the same designation many ‘advisers’ basically got in a cereal box years ago.
Seeing the conduct of some ‘Certified Financial Planners’ who only hold a DFP and still just flog products just ruins the perception of the title for me. At least with Fellow Chartered Financial Practitioner everyone knows you undertook a pretty intensive course.
Patriot,
Yes, no argument there, just trying to point out that just because you have a CFP means nothing. Doctors get done for medicare fraud or patient molestation, accountants (CA’s and CPA’s and others go to jail), advisers get struck off, imprisoned, or as happened yesterday, have their passports taken.
Integrity doesn’t come with a piece of paper, nor paying a membership fee.
Anyone who thinks otherwise just doesn’t have their eyes open or is naive.
Pavel,CFP means nothing from ethical perspective any more than LLB does or Phd or MD. It shows the pact between FPA and industry funds that CFP (owned my FPA) is the qualification. Glad to be able to opt out of the lot of them. And Wildcat, some very good advisers came out of the old lifies – dont tar everyone with the same brush…I know of recent CFP’s that I would not trust…as you say,how to tell? Birds of a feather flock together…FPA Industry Super
Its amazing what rubbish you can pick up on the end of your line when trolling.
Looks like we have caught yet another Pavel!
Better throw it back.
You raise a good point Wildcat. It is impossible to tell if someone has become a CFP through a rigorous academic process, or whether they were handed their CFP on a platter as part of a shabby arrangement 10-15 years ago.
It is time for the FPA to rescind CFP status from those who haven’t completed the educational components. The continued use of the CFP designation by those people undermines its integrity. It’s time to fix the mistakes of the past and be proactive in protecting the CFP brand, before the media runs with the issue.
It’s time this industry recognized the hard yards of university study and years in the job, and not memberships and gifted certifications. Once the ASIC register is complete, this is where the selection process should come from….not who belongs to what.
Pavel,
The FPA handed out CFP’s to old lifies, it guarantees nothing.
The one’s that earned their CFP through the course are obviously a different kettle of fish but how to tell?
As for a partnership with an industry – those that want it can have it as far as I’m concerned.
I would happily wager the trolls on this blog have no clue how these strategic alliances work in practice. Firstly, my mail is that an external planner must be CFP and their practice certified a Professional Practice by the FPA.
I expect the haters below and the ‘likes’ their comments have attracted are neither and wouldn’t therefore be approached in a month of Sunday’s to participate in these sensible alliances
was CBus deal payback for FPA doing the backdoor deal with Shorten on “opt in”?
Everyone still thinks VI is the answer in the advice sector for some reason. I guess it’s easier than lifting your standards of service and product performance.
What a contradiction. Industry funds want to develop referral relationships with independent advice practises. How would that work ? Surely referral sources need to be disclosed so that clients understand that the adviser has a vested interest to keep the clients in their existing super fund to keep the referrals coming.
Yep! Shit can us for 10 years then want a relationship. As if. With IFS funds woeful levels of service and officious approach to everything I cant see in this life time why I would ever be attracted to any form of assistance to this movement.
There shouldn’t be any deals done between entities. If an adviser is suitably qualified and experienced to provide the advice (and they can ask to see that or look at ASIC register), that is all that should be relevant…not some cosy stitch up between an industry fund and a certain planning group.