Jordan Vaka

Perhaps one of the most vocal groups criticising financial planners has been the Industry Super funds, cooperating under the Industry Super Network.

Much of their focus has been upon the commissions paid by retail funds. They’ve communicated this message through the media, advertising and a variety of other marketing channels (the blanket advertising of Southern Cross station in Melbourne was particularly memorable.)

Planners hate this sort of stuff. They get huffy about it, complaining about this and complaining about that. But they never get any traction with their counter-arguments for one simple reason – the ISN has set the terms of the discussion firmly on commissions and that’s a loser of a position, any day of the week.

In short order, when talking about commissions, the ISN is right.

Own the Argument
What planners should do is avoid the commission debate, because it’s been settled. We need to move on and attack the sort of dicey accounting and approach to marketing that suggests the truth is little more than the occasional inconvenience.

Planners need to take the front foot when confronted with this sort of attack, but because of the overwhelming insecurity throughout the industry, we’re collectively struck dumb.

So, here are two things that I think planners should do to try and address the criticism coming from the ISN:

Reposition the Argument
We need to get better at explaining what we do for clients, and better quantify the benefits our work can bring. In every Statement of Advice, I provide a guide figure that explains, in generalised terms, the level of benefit our work is bringing our clients. This is commonly a six-figure amount, calculated over a number of years.

ISN can carry on as much as they like about commissions, but until they start servicing their entire list of clients effectively and give them the value that I, and other planners can, I’ll take it with a grain of salt.

(Incidentally, ISN will claim that they have a host of financial planners on staff. Ask everybody you know that has an industry fund and see when they last heard from a financial planner. Low fees are one thing. Inadequate service is another.)

The ISN are not perfect in their operations, and they’re hardly immune to criticism. So let’s get on the front foot and retaliate. It has, after all, been some time since they started this Compare the Pair rubbish.

So let’s talk about the preponderance of unlisted assets hiding in their portfolio, yet-to-be-repriced so they’re propping up performance figures.

Let’s talk about the woeful levels of customer service anybody daring to call in will face.

Let’s talk about the wilful delaying tactics employed when somebody tries to transfer their funds out of an industry fund.

Let’s talk about the opaque investment vehicles where nobody can really say, with any certainty, what’s inside.

Let’s talk about the slightly hypocritical feeling that comes with seeing an organisation rail against commissions, then spend millions advertising themselves.

Finally, let’s talk about the relationship between industry funds, the country’s unions and the government, and why it is that the government mainly chose industry funds as the default funds for most Australians.

Now, this isn’t to say that everything the ISN says is wrong. Heaven knows planners deserve a bit of criticism. But whenever I see a campaign mounted with the sort of holier-than-thou attitude we’re seeing at the moment, I always want to know what’s going on behind the scenes. So, c’mon planners, get out there and defend yourselves.

Jordan Vaka is the managing director of Tangram Financial, a financial advisory company Doing Things Differently. He knows the deep and lasting value a trusted financial planner can bring to a clients financial position and wants to get people talking about the benefits financial planning can bring – not just the well-publicised negatives.

Which isn’t to say that he thinks the industry is immune from criticism – far from it. But he knows of too many diligent, prudent and caring financial planners to write them all off. So he encourages all of these hard-working planners to talk about the good they’re bringing to their clients, and fight for their industry’s reputation.

Jordan also keeps a regular blog, My Advice to You Is…, which can be found at, where he is continually talking about what financial planning can do for people.

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