Speaking on the sidelines of the Implemented Portfolios (IP) Study Tour 2015 in New York last week, the longstanding industry fund boss said spending a week learning and travelling alongside non-aligned financial advice professionals has altered his perception of the small business retail sector.
“You could well ask me, ‘what is an industry fund doing rubbing shoulders with all these IFAs?’
“Well, what has become clear to me is that we share the same goals. Why is the industry fund sector suspicious of the retail and vice versa?
“We need to embrace each other and find ways that we can partner together to provide a better standard of advice.”
Mr Rodwell-Ball indicated some of the suspicion on the part of industry funds may stem from the for-profit nature of the retail financial advice sector, but said he now realised that this business model does not preclude the two segments of the financial services industry from having a “shared vision” for the “glorious retirement” of their clients and members.
“If we don’t find ways to partner, we will forever be a fragmented industry and fragmented industries are immature,” he said.
The non-aligned advice sector and industry funds are united in being “challenged” by the major bank-owned wealth managers, Mr Rodwell-Ball added, saying he is not sure how the “major players” fit into this collaboration and whether they share the goal of client-centric advice provision.
“We are all really challenged by the big institutions – you are and we are, but we should use it as an opportunity to improve, not be intimidated,” he told the non-aligned advice practitioners also participating in the IP Study Tour 2015.
However, the fund executive also said social and cultural obstacles to greater collaboration between the two sectors remain.
“The question for us is where to meet these partners. I have long thought there is scope for more collaboration with the independent non-bank sector, but where does an industry fund come across these operators?
“The industry is so fragmented and the relationships don’t exist. We move in different circles.”
The comments come several months after former Local Super boss Nick Szuster told AIOFP conference delegates that industry funds are increasingly looking for partners in the advice space and have a natural bias towards non-aligned businesses.
Old Risky (comment #5), well said.
“We share the same goals”? Rubbish. The primary goal of union funds is to provide financial and political support to unions. Superannuation is just a means to that end. The union bank (ME) is another means to that end, so are the various slush funds gradually being uncovered by the the Royal Commission.
The ISA has used advisers to cement its position in Superannuation members minds. The ‘We don’t pay commissions to financial planners’ has resonated with the public and as advisers we need to think about that. Good campaign and achieved the result of taking market share from the retail and public sector funds.
Advisers now need to distance themselves from this argument – this isn’t our fight – unless you believe the only appropriate advice you can give is immediately moving a client away from heir existing ISA fund.
ISA funds do need to improve third party access and many have no where near the functionality we expect from retail platforms as per Ben’s comments.
If they improve in these areas there is no reason we cant work with these funds.
Let retail and ISA fight for market share and avoid anymore collateral damage to the advice industry’s reputation by staying out of it
The ISA started this rot. They saw IFA advisers as part of the system dragging in super into the banks funds, and gave IFA advisers no credit for being independent, helped by the ideology propounded out of ASIC. We have never been the enemy-that mantle belongs to banks
The ISA then got into bed with the FPA, but apparently the marriage was not consummated. And any plan to join up to large planning firms as sole providers of advice to fund members won’t work either.
The ISA needs to sort out insurance. Too many nasty TPD definitions. And then get serious and eliminate DEFAULT insurance cover because the lack of profits from insurers dabbling in Group Super is the origin of the profit gouging behind the attack on IFA risk commissions the FSC
It is morally indefensible for ISA funds to tighten up on a members chance of a TPD benefit while slagging off on IFA advisers. The insurance industry must go back to fully underwriting EVERY RISK it takes on, or eventually there will be market failure
Steve your accusation that advisers do nothing for their ongoing service fee assumes that clients are pretty damn stupid. We have over 250 clients who have been paying us an ongoing service fee for over 20 years and we have been transparent with fees for all of those 20 years. The industry super funds use lies and misinformation to flog their product. Hardly a higher moral ground from which to attack advice practises. And no we have not seen clients leave us for industry super funds. The flow of traffic is the other way and will continue to be so as clients value advice and ongoing service. All the best with your cynical views – the reality is though that our business provides a service to meet the needs of our clients ( who are not stupid ).
Positive comments, and good on him for trying to reach out to IFA’s. But there is a long way to go. Industry funds deliberately make it difficult for their members to receive independent advice. They deny IFAs online access to client data, expire client authorities, refuse to send necessary forms to advisers and block clients from paying for independent advice using their super account. Some funds even contact clients to try and undercut the independent adviser when they send through a client authority. Oh, and FOFA. Wasn’t that primarily driven by the Industry Funds? We all know FOFA hurts IFAs the most. Actions speak louder than words. I too am suspicious of the banks, but at least they genuinely try to work with us for the best interests of our clients.
I get why the industry funds beat up IFA’s, I really do. The IFA past strategies of hoodwinking clients into paying an over inflated trail commission (aka fee for service) for life simply because they got advice one day from the IFA is shocking for the FP industry. Its like the real estate industry charging a trail when you buy your home from an agent & every year they meet with you to shower you with regurgitated market info.
But, after researching the industry funds fees & cost of insurances I have found they are overcharging their members terribly! Seriously, these industry funds are making a fortune under the umbrella of being saints. They are shocking. I’m sure most know this but unless you call them often with real examples it’s easy to miss.
Industry funds need a fight & if the IFA’s were smart, a group would break away from this FPA created mess our industry is caught on and give these industry funds the fight of their lives & take away their perceived holy ground. Instead, IFA’s are losing ground & the majority drowning in compliance & paperwork cost thanks to the self serving FPA.
Meanwhile, the industry funds grow & pick off the IFA with ease one by one and it will get worse.
Common sense at last. The us and them approach hopefully will disappear. We are all in this profession for one reason-clients. Finding independent and independent thinking advisers is not that hard and remember not all aligned advisers are anti industry fund, you may be surprised at how many advisers work with and advise on industry funds.