As major changes around superannuation tax heat up in Canberra, the government will soon turn its attention to an adjacent issue: affordable financial advice.
No announcements have yet been made on Michelle Levy’s recommendations, but the move to create a simpler system for superannuation funds to provide advice is expected to gain support.
Asendium co-founder and CEO Scott Miller, a former financial planner, believes the report could see advisers transition from their businesses. But rather than exit the industry, he says, they may join the super funds.
“Licensees are facing a major problem,” Mr Miller told ifa. “If they don’t start making it easier for advisers to provide advice, planners may see attractive job openings at super funds and leave licensees to go to the product provider.”
Super funds are already providing advice in many ways. Cbus provided more than 28,000 SoAs last year, Australian Super around 8,000, and REST over 19,000 SoAs from 25,000 digital advice interactions.
Mr Miller believes that, if enacted, the Quality of Advice review recommendations could trigger a hiring spree for the industry super funds who are looking to re-enter the advice industry.
“If that passes, imagine how many super funds will put out job adverts for planners. They could put out a job ad with a very attractive salary package. If I’m a planner on $120,000 a year dealing with an absolute headache with compliance and working in outdated systems, I could go over there to not only support my family on a good package, but to continue in the profession in providing quality advice within that institution through their comprehensive advice channel,” he said.
“Licensees could soon be battling product providers for the talent of planners post QAR if they don’t seek to make it easier for their planners to provide advice.”
Industry fund UniSuper has one of the more sophisticated financial advice offerings among product providers. It currently employs 76 planners and produced 42,571 statements of advice (SoAs) last year.
It offers three different types of advice: general, select, and comprehensive.
UniSuper’s general advice offering is free, and allows members to learn about their super and other products on offer.
‘Select’ advice is for contribution and investment strategies or to review insurance attached to a UniSuper account. This costs between $80 and $120.
Finally, UniSuper also offers comprehensive financial planning, which covers retirement planning, non-super investment, debt management, personal insurance, government benefits and aged care. It costs $310 an hour.
Some of the funds UniSuper planners advise on include AustralianSuper, Aware Super, HESTA, QSuper, Super SA, UniSuper, VicSuper, HostPlus, PSS, SASS and West State Super.
And around we go again.
Why would these product manufacturers need to employ Financial planners when clearly they can produce in huge numbers SOAs like a factory,
“Industry fund UniSuper has one of the more sophisticated financial advice offerings among product providers. It currently employs 76 planners and produced 42,571 statements of advice (SoAs) last year.”
IMO, that is some serious product figures – and Michelle Levy wants to make it easier for Product Manufacturers specifically. Financial Planners not likely to be needed under best interest.
Wonder what % of the time the in house product is recommended?
Wonder if the in house product is paying bonuses or similar?
Wonder if any product manufacturers help with office space rents or equipment?
Wonder if any product manufacturers subsidise the provision of this personal advice?
Has ASIC ever investigated these issues at this end of town?
All these super accounts have similar invest strategies and exposure to illiquid assets whose values are estimated rather than offering true values
Very limited advice offered
Nothing like self employed advisers
$120000 is a low base income and it will not attract quality mature advisers
This is exactly what the Union Super Fund want. Maintain their horrendously unfair playing field, where their vertically integrated advisers can be paid high salaries from the ongoing admin fees (with member informed consent), whereas their retail competitors are ham-strung with Annual Fee Renewal Consent forms (that do not exist in any other nation on earth). This is all highly uncompetitive. The Union Super Funds should be prosecuted for unfair market practices, in charging ongoing advice fees without member consent nor renewal consent. This is a MASSIVE scam.
It’s funny hearing industry fund “advisers” trying to explain the advice process. They seriously get to avoid most of the legal requirements on the basis that they only have one product on the APL
If you are a planner on $120,000 per year then you need to get out & earn a minimum of 3 times that to make it worthwhile.
If I buy a Toyota, I can take it to them to service it, and be smart enough to understand it will be inexperienced apprentices doing the work, or I can take it to a proper mechanic with 30 years experience who’s business relies on his/their own personal workmanship and reputation instead of lazy purchasers of new car sales.
There will always be a place for both, but sadly, just like most people who get their car serviced by a dealer don’t understand it’s a tick and flick service, most people who use an industry fund and their advisers also don’t understand what they’re not getting too. People don’t know what they don’t know, and that’s okay, because there’s not enough of us advisers to meet the need of smart people as it is, let alone the rest of the population.
You are free to buy a Toyota – or not. Toyota is not able to take a fee from you for servicing your car just to service those that request the service – why is this OK for Union Super when it was not OK for Commissions?
Or is it the case that you simply believe these people “most people who use an industry fund and their advisers also don’t understand what they’re not getting too.” don’t serve better – sort of like a second class type of person not worth?
Wow.
Perhaps Superannuation should be voluntary, that way, like a Toyota example, people have a choice.
People don’t know what they don’t know, and that’s okay, because there’s not enough of us advisers to meet the need of smart people as it is, let alone the rest of the population.
You really are missing the point. Uni Super Planners appear to be / are doing 560 SOA’s each per year.
If real financial planners could operate under that sort of compliance (it looks to be very different – or perhaps rule don’t apply), then nearly 9 million SOA’s could be provided – now that would put a dent in the FUM of Union Super – I suspected that is the real issue and the reason Financial Planners appear to have been targeted by Treasury and ASIC – and thanks to Liberals – Financial Planners not directly controlled by Union Super have reduced in numbers. But of course, I could be wrong.
Time to set up an association for Industry Super floggers…
Hang on Financial Advice Association to the rescue! just in time!
So UniSuper planners provided an average of 560 SoAs each last year. If we assume 46 work weeks (to allow for leave, training etc), that equates to 12 SoAs per planner per week. I doubt that there is much quality, comprehensive advice being provided on those terms.
This will be the equivalent of the junk food industry & Drive Thru.
What appears to be appetising at first & satisfies a need, quickly results in a feeling that maybe spending a bit more time and money having the proper stuff would have been a better choice.
It will turn Financial advice into a churning sausage machine.
Personal relationships will be non existent in that world…it will be about volume & numbers.
Most members will probably never even meet their ” Adviser” face to face, but the member will expect that level of care,
concern & commitment from a faceless individual who will be under pressure to deliver results by their employer.
It will the banking model reinvented.
UniSuper has 76 advisers and did 42,571 SOA’s last year!?!? That’s 560 SOA’s per adviser. Tell me that’s not cookie cutter advice going on over there.
Guess who was recommended 100% of the time
Looks that way. Seems we have two sets of rules in Australia – one set for Retail Super and one set for Industry Super? The big question is who is the “head of the snake” so to speak?
if there are about 235 work days in a year (less 4 weeks holidays) then these “advisers” are churning out 12 SoA’s per 5 day week. NO WAY IT IS NOT COOKIE CUTTER!!!
Conflicted Advice only by tied agents owned by vertical Industry Super.
What a disaster.
Great job Canberra :-/ NOT
11 SoAs per adviser per week.
I guess that is 11 hours work.
I wonder what the UniSuper advisers do for the rest of their week…LOL?!?
Uni Super members get what they deserve I guess?
Thank god the conflicts issue has been delt with – no more banks and AMP – just Industry Super recommending Industry Super remains so all is good – WTF? No one saw this coming?
Yeah but anyone honest would admit Industry super recommending industry funds is preferable to ex bank tellers and personal loan writers turned into financial advisers after a 6 week integretec course recommending bank retail … that was a debacle .. and absolute rip off to the consumer .. industry super may have been founded on dubious motives – albeit the entire modern super guarantee was a incentive to get unions to agree to the wage accords of the early 80s and hence control wage push inflation. On union dues alone the whole union movt would have collapsed from falling membership and they knew that … we know there is conflict – its not a throw back to the Jimmy Hoffa era but its conflicted but at the end of the day I believe its less harmful than Banks going into the space again and overall may prove beneficial. Advisers will adapt different attitudes in time and start seeing we can all work together. We are just a small part of this in the scheme of things
“Yeah but anyone honest would admit Industry super recommending industry funds is preferable to ex bank….”
David, not anyone sorry. Perhaps you can tell me – how many time has ASIC reviewed Advice provided by Industry Super for consumer detriment?
I understand what you are saying and I am not for one minute on the side of industry super… I would love to click my fingers and move these giants along to bother someone else but all I am saying is we need to be realistic – Industry super is the biggest power in this country by far … politically they are extremely influential –
We have zero power – they will use us how they see fit – hopefully that leaves us a role somewhere in the future.
We may all end up working for them.
My biggest concern is industry super investment’s because their previous good performance was based on equities – shares etc Aust and international – they now have huge exposure to Chris Bowens renewables and alternate energy – I do not believe in Climate emergency rubbish so I am biased to give an opinion but I think the glory of the past is in no way guaranteed for these funds going forward. We may all come to regret them not opening up super for people to access now. Especially the non homeowners. People need houses first and foremost and our economy needs construction … Scott Morrison said – I would rather give super to people who need a home then leave it with the trade Unions (to spend on renewables and themselves)