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SMC apologises for ‘mischaracterisation’ of dodgy adviser comment

The CEO of the Super Members Council says her remarks were “not intended to be generalised to all financial advisers”.

On Wednesday, the Super Members Council (SMC), which represents Australia’s largest funds, including AustralianSuper and Australian Retirement Trust, announced that it supports the first Delivering Better Financial Outcomes (DBFO) bill in its entirety.

Providing reasoning for its unequivocal support, chief executive Misha Schubert said the DBFO, and more specifically changes to section 99FA of the SIS Act, would help stop “dodgy financial advisers” from using cold-calling businesses to solicit clients.

Schubert also called for the tightening of anti-hawking laws, on top of the swift passage of DBFO legislation, to prevent “rip-off merchants” who are exploiting a hole in anti-hawking legislation – which bans the unsolicited selling of financial products – to secure “exorbitant advice fees” from unsuspecting consumers.

After her comments were met with substantial opposition from the advice community, SMC issued a statement on Friday, attributed to Schubert, in which she is quoted as saying that she “deeply values the role of high-quality qualified financial advisers”, particularly as it pertains to the role they play in providing advice that is in the “best interests of super fund members”.

“Disappointingly, some comments I made in a media release earlier this week highlighting ASIC’s recent concerns about a small subset of operators using cold-calling and online click bait tactics to pressure Australians into moving their super into underperforming products have been mischaracterised,” Schubert said.

“The remarks were not intended to be generalised to all financial advisers.


“I regret – and apologise for – any offence that the mischaracterisation of my remarks caused to reputable financial advisers who are working faithfully in the best interests of their clients.”

Moreover, Schubert called on “everyone to work together to secure the swift passage” of the “crucial reforms” currently being considered in Parliament.

“These landmark reforms will ensure millions of Australians can plan confidently for their retirement, informed by reputable financial advice,” Schubert added.

“That achievement will powerfully help the 11 million everyday Australians with their retirement savings in profit-to-member super funds in whose interests we advocate.”

However, Schubert’s recent statement seems to overlook a crucial point – the profession’s concern wasn’t just about the term “dodgy advisers” but also the characterisation of these entities as advisers.

Mary Delahunty, the CEO of the Association of Superannuation Funds of Australia (ASFA), defended financial advisers in a Senate hearing on Thursday, deeming the use of the term “dodgy advisers” inappropriate.

“I don’t think it’s correct to use the term adviser in the categorisation,” the ASFA CEO said.

“Certainly parties at the moment have managed to insert themselves into the conversation with members and we will prefer that that be done with the funds and with licensed financial advisers.

“I don’t think it’s correct to use the term adviser in that particular, you know, categorisation ... I wouldn’t say you can categorise them [licensed advisers] as doing cold calling.”

Similarly, Financial Advice Association Australia (FAAA) chair David Sharpe expressed his disappointment with the SMC via LinkedIn, particularly the use of a “broad brush slur”.

“In a recent media release the SMC made reference to financial advisers as ‘rip off merchants’ and ‘dodgy’,” Sharpe wrote.

“It may be this language was meant to apply only to the tiny minority of advisers who do the wrong thing – if so, it wasn’t made clear. I’ll extend the courtesy that this was clumsy rather than deliberate. Regardless, such inflammatory and inaccurate language does nothing to help consumers or anyone else.

“Let’s be clear – the absolute vast majority of financial advice professionals work hard as the financial guardians to protect and grow the financial wellbeing of their clients.”

This sentiment was also enforced by FAAA CEO Sarah Abood, who said the language was “inappropriate” and “unfortunate”.

Referencing the exact report the SMC’s CEO cites as evidence of the presence of “dodgy advisers”, Abood said: “What has not been mentioned is that that report found that less than 1 per cent of the cases it reviewed showed any evidence of fee for no service and less than 0.07 per cent of those cases showed evidence of excessively high fees, according to ASIC’s definition.”