AIOFP executive director Peter Johnston has followed up his call for greater political will among advisers with a reminder that industry super funds are at least better than the banks.
“No surprises that the ALP will favour super funds going forward, it’s got to be better for consumers than having the Liberal Party favouring the banks/institutions – just look at the scoreboard,” Mr Johnston said.
“When you look at the track record of the banks/AMP/institutions over the last 25 years, they have been generally very poor. High margins, below par returns, just not very good for consumers … Google the worst super in Australia over a 10-20-year period and they all appear. Then Google the best and the industry funds dominate.”
Ahead of the anticipated release of the government’s Quality of Advice Review response at an exclusive ASFA event on Tuesday, he said that the advice profession needs to accept that industry funds deliver better results.
“It is time the independent advice community accepts these irrefutable facts and recognise that the industry funds are moving away from the vertically integrated model into a hybrid model of internal advisers/staff servicing members and outsourcing advice to the independent sector,” Mr Johnston said.
“The biggest, AustralianSuper, have substantially reduced their internally employed advisers and have over 3,000 external advisers to service their members, and others are duplicating this model.
“They have worked out that non-SMSF advisers are fund agnostic and by working on a fee-for-service basis (and the super fund is quality) they are not a threat to the FUA of their fund.
“In fact, the advisers use the funds for their own clients and increase inflows to them. This allows the fund to reduce adviser costs and mitigate AFSL risk for the directors, a great outcome for the fund members, which is the way it should be.”
Mr Johnston added that advisers have no need to see industry funds as a threat.
“Advisers in the past have reported that clients favourably respond to them offering an industry fund as an option. The industry funds have spent plenty on consumer education and we should no longer see them as a threat, we should embrace them,” he said.
“Just be careful what you wish for on Tuesday morning!”
So why get advice at all, the AIOFP can tell you that everything you need to know about super is on google.