IFS employs 75 full-service financial planners who are “embedded” in 16 industry and government superannuation funds, including AustralianSuper, HOSTPLUS and CBUS.
Speaking to ifa, IFS executive manager for wealth management, James Grant, said every planner he has ever worked with – in the retail or not-for-profit industry – did “a great job”.
But the “key difference” between the two sectors is that IFS has a “driving goal” of bringing advice costs down, said Mr Grant.
Unlike retail planning operations, IFS is a not-for-profit organisation focused on reducing costs to its superannuation members, he said, adding that IFS financial planners do not receive commissions for putting members into particular products.
The fee charged to members for comprehensive advice is not linked to the amount of funds under advice, Mr Grant said.
Industry fund members are charged a flat fee which is not related to the size of their account balance, he said.
“Our goal is to see as many people as possible and have a service that isn’t about seeing people with lots of money – we provide the same level of help and assistance to someone who’s got $20,000 as someone who’s got $500,000,” said Mr Grant.
Mr Grant has a master’s degree in financial planning and has managed teams of advisers in the retail banking sector as well as the not-for-profit sector.
“My goal is to develop a model that ensures people with not so much money get exactly the same level of professional service as those people that have a lot of money – I can’t necessarily say that about what my goals were when I worked in the retail environment,” said Mr Grant.
now that industry funds are so popular apparently, lets see them suffer from the tall poppy syndrome.
Senator David Bushby today announced should LNP be successful they will come under greater scruitany of their practices. Donations to unions, effective rate and real rate of returns, Advice without proper disclosure for all their reps driving around from work plcae to work place, phone sales, conflicts of interest, Lets hope LNP wins, grouse isnt it that politicians now know how ethical they are. From little things Big things Grow
I worked as a Planner with a large industry fund within the IFS network (Restricted License). I received very good annual coin; was told that I start at 8:30 and must leave by 5:00; and I spoke to any type of member who had any type of balance in their fund – I still received the same coin to look after the members. I wasn’t stressed – it was an easy job. Now back out in the ‘real world’ I work longer hours; provide holistic solutions; I have more challenges; and I don’t quite earn the coin that I earned at IFS. And then the coin dropped – who was paying the coin I earned at IFS? Yep – you guessed it… And there are a lot of wankers at the top of the IFS tree to boot…
No doubt about it they can hold their head up high There’s no corruption within the unions who control most of the industry funds !
If it is not for profit how then do they find the huge sponsorship money they palm out to various football clubs and codes each year ?
Quarter of UK planners exit industry…..
very interesting stats……..
i predict 10 to 15% shed by the Banks and when the ISN network realises the cost involved they wont know what hit them. Old tied agencies here we come
I agree Andrew. We are provided with so much marketing gold that we should use it. I find it hilarious if not a bit sad at the same time that what the Industry Super funds put out there as strengths are actually their biggest weaknesses. I get a sense that they (ISN) are starting to realise that they have thousands of smart, ethical, client focused practitioners out there that have been stirred into action and will not sit idle and have their great work for their clients denigrated by an Industry/Union collective pursuing control and power.
Mr Grant may be right in relation to the other places he has worked. He is not right and is somewhat sanctimonious in relation a very large number of advisers who have been privately operating in a most ethical manner for a long time in a hostile environment and in the face of public and institutional ignorance, probably while Mr Grant was still in school. Just get on with the job sir.
A post script to my earlier comment.
I’m pleased to hear a little fight left in some of you. For too long criticising other planners or the industry has been portrayed as reflecting negatively on the industry as a whole. Grant is attacking the rest of us and we need to get on the front foot.
The industry fund rep has made clear that if you walk into their offices with $500,000 in investable assets you will get the same advice proposition as someone with $20,000. That is Mum and Dad with a lifetime of accumulated complexity will receive the advice model that their 20 something kids in a shared rental, a bit of super and small bank account would receive. Correctly handled this is marketing gold.
John Symond grew a successful business attacking his opponents – let us not be afraid to take the fight outside of this forum.
I find Mr Grant’s comment typical of an industry fund employee.Their whole point of difference is on so called commissions received(which so many other industries use this typ of model ie real estate). All financial advisers are registered with ASIC and hold a licence, which has strict rules & requirements & who search the market place & align themselves with a dealer/employer that aligns with their values & belief systems. This kind of choice is absolutely everywhere & not just with Financial Planning. I don’t believe that one service is better than the other because people have different needs & it is not one service fits all (very narrow view). I would much rather see the Industry Funds spend their money working on improving their systems & processes & make their service the best it can be, rather than criticise the retail industry as their focus/point of difference. You don’t see any retail fund managers denigrating the obvious shortfalls of an Industry Fund service offering!
What a totally repugnant situation. This shows the ISN are scared that they have to resort to such repulsive bile. All IFA work for their clients and solely their clients. When are the ISN going to come clean that they take the franking credits from the member pension funds and use them for other purposes, instead of applying them to each client accounts as they are suppose to under the Sole Purpose Test. Why do you think SMSF is so popular, smart investors with the advice of IFA are working for their clients to get away from this rort. Its been going on for years. How do they explain away the extensive advertising? who pays for that? The members of the Industry Funds thats who. Industry Funds don’t work for members but the corrupt cabal of Unions and Industry Fund supporters.
Funny how “not for profit” seems to be seen as good when the “profits” are going to unions. When will ISN funds disclose where money goes properly in their annual reports…when will they be transparent and allow independent research? WHen will phone calls get returned from ISN funds? When will they make it easy to deal with ISN funds? More spin as expected without any reality of what they are truly about – power and greed. I reckon without industry (union) funds there would be broke unions around….by the way, I am flat fee based in my service offering but I don’t knock those that choose a different path.
I wonder under disclosure if the profit that is paid to unions is disclosed. Interestingly the info states all profit to members. I wonder if ASIC has ever completed a compliance review. Bet enforceable undertaking may appear in the IF dictionary.
All planners, not for profit, private practice or institutionally aligned, deliver a service which must operate on a sound commercial basis and clients (through one form or another) meet the cost of services they consume.
There is something profoundly naive in the rhetoric being dished up by the Industry funds. It is clear the service model of the industry funds has more or common with the institutional advisers than Mr Grant may publicly care to admit. The corporate objective for both is to retain and grow FUM and revenue. Each implement advice solutions through a vertically integrated product offering and neither, from my observation, offer strong client focussed strategy support. Hardly is it of surprise that Mr Grant successfully transitioned his career from one to to the other.
Many clients accept this service model others prefer the strategic approach of non aligned practitioners – let the market decide and leave the pious rhetoric aside.
The Australian public need more education. They need to know the difference between an Industry Fund planner, Bank planner and IFA. You get what you pay for as in any industry. No one can compete with an IFA on a service proposition level. If you want full advice with an ongoing long term relationship you will pay for it. You should also value the advice and benefit from it.
I agree with Gerry, the problem to stop this War is real simple, ISN should let us charge our fixed fee or % based fee like they do to their Fund, so they can keep their % based fee and we can agree, make a amendment to Best Interest Duty if its a Industry Fund we must leave it, to keep the Communists happy, then the war cn stop, who knows they may receive more funds if they start improving their back office systems, allocated pension service, reporting, Insurance claims etc…. Lets work together. They may even invite us to their conferences
I feel Industry super is fast realising they may have won the first round in a fight they started but are going to lose the war. Their attacks are unsustainable as bit by bit they are shown to be completely self interested. I for one don’t let an opportunity to go by to let people know the true nature and motives of Industry super which is essentially a power base for the union movement to replace the fast dwindling power base of Union membership. This push will go the same way eventually as the community wises up. Every day their is a desperate article from Industry super supporters who feel and know the tide will and is turning in favour of advice from practitioners who have a clients interest at heart rather than a grab for political power.
Industry Funds are possibly the most corrupt organisations in the country, but through political influence manage to target the unsuspecting Australian public and masquerade as their defender. This is not about war or advice, planners are an easy target. Its about power, control and individual greed.
Just shows how out of touch with the real world some people in the Industry Funds Network are. There are countless totally professional dollar based flat fee practices on the ground i.e.the cost is not related to the balance. There is a real cost to providing advice and if these Industry based planners can do it for a lot less than a retail based planner then either they’re doing it in a compliant way, or they’re not disclosing the real cost, or they’re not giving appropraite advice. Also interesting to see another article this morning where Mr Grant confirms that these Industry based planners are still giving ‘reasonable basis’
advice. They obviously aren’t subject to Best Interest Duty yet – lucky them!!
Wow. Another IFS guy looking to put his name up in lights. I personally think they are going down a rocky road. Don’t slam the advice industry and set up your own sweat shops to keep money in your funds. ASIC will come knocking one day and the house of cards will start to fall.
I don’t know what the writer has been taking but he is obviously out of tune with reality. Most advisers have been operating on a fee for service for some time-regardless of funds-and for work actually performed. Rest assured we do sleep well at night. You may actually be surprised-if you open your eyes and not your mouth-to find that many IF advisers actually charge MORE than retail advisers and dish out less than adequate service-but yes, on a budget. Horses for courses mate-low cost equals low service and outcomes. The sooner ASIC enforces the same rules for all-the better.
I fail to understand how an advisor can act in the best interest of their clients if they are employees and have no choice in what solutions they recommend…
Personally I wouldn’t want to work for an employer that denegrates and ridicules our profession. One that disguises their fees, lacks transparency and uses their political links to achieve regulatory changes that create an unlevel playing field. And then, after achieving that competitive advantage, introduces massive increases in fees (via insurance premiums). But each to their own.
Gee Mr Grant , thousands of Financial Planners around Australia look after client with $10,000 to $1 Million , but they do not need to go to print like you and try and justify what a great Job they are doing , they just get on with it.
We got a call from a retired client who is 80 yo asking us why her husband has been put into rehab , we do not charge her for that we just take the call and reassure her all will be OK , and also contact her family and advise them of her concerns , all for FREE , so get off your high horse
James Grant, what are you insinuating? I hope you are not going down the same track as Whitley’s ISN.
Some statements that have been printed are a heart’s beat from litigation.
James your organisation has some of the highest paid advisers in the industry. Can you categorically state that they are working at a rate (and obviously charging the relevant fees) which is covering their income & benefits plus that of the support team and let us not forget your wages? If not where is the money coming from. Your claims could only be justified once a level playing field with regards to reporting from all parties comes into effect.
How hypocritical can you be. Why is quality of advice linked to cost? He is correct, Industry Funds don’t pay commissions to planners, but they do receive commissions! Ask them about commissions on automatic life insurance? How can you call their advice ‘comprehensive’ when it will only ever advise on their own funds. Do they permit advisers to advise clients to remain in non-industry funds…..certainly not in the SOA’s I’ve seen. How about novel approach to this: we stop attacking each other and let the clients decide what is best for them?? Wow, how revolutionary is that idea!
This I find offensive due to its lack of truth. I know a deal of industry fund financial planners who give very very limited advice and dont provide full service like many other financial planning firms that are totally flat fee. By providing the same level of help to someone with $20,000 and $500,000 shows the limitation of the advice – the latter will most likely have very different needs to than someone with a smaller balance. This sort of trouble mongering causes the industry no end of problems rather than good – come on IFS work with the industry rather than trying to run it.We all have bigger issues to deal with.
They ought to stop with this war…..it’s going nowhere except painting the entire industry as being greedy. Why don’t you let other advisers charge a flat fee for advice from your industry super funds or are yo protecting your precious FUM that earns a percentage based revenue.