REST confirmed to ifa that the fund will be building its financial advice division “from the ground up”, not previously having had its own advice proposition.
The industry fund for retail workers partnered with Link Group’s financial advice business Money Solutions in 2005 to offer advice to its more than 2.2 million members.
According to the REST website, it still offers advice via Money Solutions.
To oversee development, REST has recruited Deborah Potts – who has held senior roles with ipac Financial Services and BT Financial Group – to the newly created role of national manager of advice.
Ms Potts will also be responsible for leading the provision of the industry fund’s advice services.
The overall goal is to achieve a greater uptake of financial advice from among members, a statement from REST said.
“This is a new function which will significantly benefit our members,” REST chief executive Damian Hill said. “Deborah has been working as a consultant at REST since October 2014 so she’s already familiar with our business.”
REST has also appointed two new general managers.
Beth Parkin, a former executive general manager of customer service at Travel Corporation Australia, has been appointed to the newly created role of general manager of customer service.
Ms Parkin will be responsible for managing operations services, insurance and technical teams while working with the super fund’s service providers, Australian Administration Services and AIA Australia.
REST has also appointed former VicSuper head of fixed income Ronan Walsh as general manager of investments. He will be responsible for overseeing the investment governance functions and managing relationships with the fund’s asset consultant, custodian and external investment managers.
The irony is breathtaking. They worked so hard to have commissions banned, but now employ the most conflicted advisers of all – those who receive 100% of their income from one product provider!
While still presumably participating in the “industry fund advertising” which maligns the advice industry as a “kick back rort”, Rest will now set up a vertically integrated “sales team” and call this advice. Hypocrisy!
Quoting David – [i] “Having worked in the retail sector most advisers choose the implementation product because 1 there dealer group has force them to choose”[/i]
But this is somehow different to REST only recommending IT’S OWN IN HOUSE PRODUCT. The rank stench of hypocrisy!
Secondly, the fact they are only paid a salary and need desk (overhead) means it is not free. It means it must be paid for, this means someone has to pay. It is NOT free.
That’s how a real business is run in a capitalist based system. We could try a workers paradise perhaps, all of those failed except China and Vietnam which both embraced a fully mercantilist or capitalist economic system.
David you really need to look at this proposal for what is, you are blinded by loyalty perhaps but the reality is clear for others to see.
David, if the adviser is operating under an AFSL, which for private or personal advice they must, they are under best interest duty to consider appropriate options including the implementation vehicle, be it REST or otherwise.
They cannot, under the law, restrict their advice by limiting to one product, this would be illegal and you cannot contract out of this situation. You can also get caught if the client “could” reasonably assume that you intended for them to retain the product or use a new pension product, also by REST.
Thanks Labor…for nothing! Jackie Lambie and Ricky Muir just behind.
Secondly, if it is “free” I doubt very much the planners will be operating for no pay and no overhead support. It is therefore NOT free, it is simply cross subsidised from all members fees.
This is unfair. Given a super trustee has a fiduciary responsibility to all members and to treat them equally but provide “free services” to some members, that say a young member may have no use of, is an interesting conundrum for the trustee to figure out?
It is no where near as simple as you make out.
Most Industry super funds only offer inhouse advice and limited advice this advice is free, the advice came be about educating how to setup a TTR to how much they came contribute or what tax is applicable. When clients want products not offered or advice on external products are offered they refer them to IFAs appointed by FPA.
I think this is good news as more Australians will be able to get advice which can only benefit the Financial Planning Industry
There are a number of other industry funds already giving advice, so not a big deal
Having said this, it will be interesting to see how it is rolled out and what advice they are going to provide
My guess is it will be basic advice and their target will be at the lower end which is where most advisers currently cant afford to advise due to the costs associated
The UK has by statute determined that you cannot be a product manufacturer and a product distributor. This is because no matter how much integrity you try to have, advising someone to use someone else’s products suggests that you lack confidence in your own organisation.
Industry funds are product manufacturers. They may be product manufacturers owned by their members, but they are product manufacturers, working in the best interests of the collective membership, not each member individually.
You simply can’t provide financial planning advice that is disconnected to where the money is invested or insurance underwritten.
I applaud REST’s recognition that their members should be actively planning their financial future and considering estate management issues. However being directly involved in the process will find REST potentially with the same issues of CBA and others who fail to see the obvious potential conflict in fulfilling two separate roles.
How will REST feel when the advice recommends not using a PST? Either REST develops a wrap and SMSF offering or it must be prepared to lose FUM.
Interesting to see how they disclose the costs of this service to their members and also how they will justify cross subsidising members who take up the advice from members who don’t?
They may do “fee for service” but I bet it won’t reflect the true cost of the advice. Cross subsidy will still exist.
Will they recommend retail super or other industry funds under “best interest duty” when that would appropriate?
Knock me over with a feather.
At least they are now finally coming to understand the value of advice although in truth I bet they will be internally known as the anti rollover, anti SMSF Dept.
Well they have complained for years about the large banks, etc. and their vertical integration and now they are following the same route.
What a joke. No doubt the advice members receive will be unbiased and not solely directed to REST which are one of the most hopelessly administered industry funds in the market.
Does this mean ASIC will be investigating them in the same way as Medcraft and Co have pursued the big banks. Believe it when I see it.