The former chief executive of the Financial Planning Association told an Industry Super Network Symposium on financial advice in super that the regulatory environment since the Financial Services Reform Act almost 10 years ago had focused too much on ‘one size fits all’ advice.
Ms Bloch said the best aspect of Future of Financial Advice changes, aside from the crackdown on commissions and volume bonuses and implementing a best interests duty, was that it enabled the industry to provide targeted advice without having to deal with a ‘one size fits all’ approach.
So far the retail sector “has delivered high end, complex advice to people who have wanted simple, straightforward questions answered,” she said.
But the industry fund movement has narrowed that gap, delivering low cost, simple, demand driven advice. “And I think the gap will close in terms of which sector provides what sort of advice,” she said.
“I think this is the really exciting part of FOFA. Getting out and giving people the right advice for the right fee from the right person with the right regulatory framework.”
I completed a brief stint with an industry fund phone based advice team (casual employment to fill in time before moving interstate) and I quit after just 4 days. I was appalled at the advice dished out to people with little regard to their full situation. “Limited” advice is like a Dr prescribing medication for 1 ailment without asking about other things to see if the medication may cause other problems… For example – “salary sacrifice is a great way to save tax and boost super”. It is, but what other opportunities are being missed? Is the client on track to meet retirement goals? if not, perhaps gearing into property or other assets and using that surplus cash flow to fund that is required to enable them to hit their goals… Salary sacrifice while an excellent concept, may not be suitable to everyone, but a, industry fund limited advice call centre cannot make that call because they don’t discuss anything other than super…
For far too long, many advisers have received handsome commissions for little more than a word document populated by some client details (Financial Plan). And that’s not including handsome trail commissions for little or no on-going work.
Scant regard has been given to client needs as investment recommendations have been determined by commissions and soft dollar deals with financial institutions.
White-goods and hardware sellers push products with high commissions, and doctors push drugs for which Pharmaceutical companies pay them handsomely. How often do bank advisers recommend financial products not owned by their bank? It is time the public received a fair deal. Advisers can move with the times or find other work.
Hello Jo-Anne
When exactly was it that the industry super funds had experienced financial advisers on the ground providing personal advice to their members who wanted it in Bourke and Cobar and Swan Hill and Esperance and Cunnamulla and Hughenden, at little or no cost? I must have missed hearing about that.
Get real.
Russell Tym
There is no level playing field between Industry Super Funds and Retail funds and the advice industry. Advice channels constantly contend with ever increasing compliance, complexity and confusion, which force increased costs and loss of productivity. This is being engineered by Labor to assist their cash cow, the industry super funds. It is working very very well for them. Retail Funds and advice channels are the only real competition to ISF’s, thus the well engineered stategy being employed. ISF’s & the Labor govt are actively promoting through propaganda that financial advice is a commodity and revolves around price, which all of us and most intelligent people in the community, know is incorrect. We all face an uphill battle to survive whilst Labor is in power and that is the way they like it! Bring on the election and lets get this country back on it’s feet, financially at least!
Well said Mervin!
Another load of rubbish from people promoting Industry Funds. It is time Industry funds started disclosing to the members who gets the millions in Trustee fees paid annually and why are industry funds using members cash to fund footy teams. Interesting that My Super is now going to compete on level terms.
Low cost is not the same as value. Cost is what you pay, value is what you get.
Furthermore, how can an Industry Super Fund be recommended product in each case?
Answering a client’s simple, straightforward questions appropriately is half the story. The real issue lies in education of the client, which by its very nature is more time-consuming, and therefore more cost-consuming.
From my observation of and discussion with clients who have had industry funds, industry fund advice appears to “give a man a fish”, rather than “teach him how to fish”.
I’ll leave it up to the readers of my response to determine the outcome of the two scenarios and ask a rhetorical question, “Which would you prefer your clients to do?”