If I follow his argument correctly – and it’s by no means certain that I do, because it’s by no means certain that he does, either – then the evidence is an advertisement for industry superannuation funds that appeared in the February or March edition of the magazine.
By running the ad, we’re apparently supporting industry funds. Forget for a moment that the argument in that respect is completely back-to-front, it goes a couple of steps further: Industry funds do not pay commissions, therefore industry funds do not value financial planning, and by “supporting” industry funds we, too, do not support financial planning. Professional Planner stands condemned. That’s the gist of it, I think. It’s still a bit hard to tell.
I’ve heard industry funds accused of all sorts of things, but being anti-planner isn’t often on the list. It’s a difficult accusation to concoct, let alone sustain, particularly when you consider what Industry Funds Financial Planning (IFFP) is up to. I think it’s fair to say that the industry funds movement places quite a high value on financial planning. Paying no commission
makes no difference to that view. But if you’re going to level that criticism at industry funds, you have to also level it at a growing number of other funds with a nil- or zero-commission
structure, all launched with the aim of giving planners a suite of products to choose from that do not interfere with the provision of advice to clients. And the planner on the phone definitely wasn’t going to do that.
There’s no doubt that nil-commission funds have got up the noses of a segment of the planning community. But their emergence is to be welcomed. They’re a very important step in separating the provision of advice from the sale of product. The segment of the planning industry that objects to these funds is the one that looks at the torrent of money flowing in (particularly into super funds) and sees the free-ride, ticket-clipping opportunity of a lifetime. Why wouldn’t they be annoyed with funds that appeal to investors and do not pay commissions?
It interferes with their nice little earner: Give someone cursory today, and receive a (growing) trail for the next 20 or 30 years – or longer. Nice work if you can get it. “I’m obviously not going to get anywhere with you,” the planner on the phone said. Bloody oath he’s not. He made it clear that from now on he’ll be putting Professional Planner straight in the bin and will encourage his colleagues to do the same. I trust he’ll at least recycle the magazine with more thought and care than he gives to his arguments and (I dare say) to the interests of his clients.