“You’ve got a wonderful chance with these reforms, a wonderful chance, because they actually are sensible and moderate [and] the vast majority of people who have engaged in this debate are supporting them.”
Rantall says he appreciates Whiteley’s “considered advice about how the FPA [should] continue its evolution into a profession”.
“Coming from where you’re sitting, I have to say that it’s interesting and I welcome advice from all industry participants, including banks, insurance companies and the ISN, but we’ve well thought out our strategy as to how we evolve from an industry into a profession,” he says.
Rantall says the FPA “supports the provision of intra-fund advice, through the new policy of scaled advice, provided two things happen”.
“Firstly, where you have complex matters…if it’s outside the scope of the person in the call centre to provide that advice, that they should be referred to a financial planner,” he says.
“And secondly, that we see the details around the new policy on best interest, such that we can see how that interconnects with intra-fund advice.
“The real issue in getting the three out of five Australians who are not getting advice is to ensure that they have confidence in the advice system, confidence in the profession, and confidence in the economy and their super as a means to supporting their retirement wealth, and adequate protection.
“That will only come if we stop this bickering, infighting and advertising against various sectors of the profession, for commercial gain. I would call on all industry participants to focus on, if they must advertise, to focus on the importance of advice, the importance of securing your retirement future and the importance of adequately protecting your personal circumstances.”
Whiteley says there are “a whole lot of problems in the superannuation industry and the financial planning industry which the Government has moved on trying to look at reforms to improve”.
“Confidence in super is affected by a whole range of factors,” he says.
“And confidence in the financial planning industry is also affected by a whole range of factors. But I would say, along with the performance of people’s investments, the second problem is the conflicts of interest. There is a lack of confidence because of the conflicts of interest.
“I do represent a sector of the superannuation industry, and in fact the sector I represent was the sector that was there at the creation of compulsory superannu- ation, so very much a part of the heritage that we have. Confidence in superannuation is going to come from people’s confidence in the practices of the sector. There is deep concern about commissions, deep concern about high fees, deep concern about, in effect, net performance, and that’s driven by two factors, as I said: the performance of funds and what’s happening in the markets; and the practices of the industry itself.
“But where you have a compulsory system, the participants in the compulsory system have an obligation, in my view, to have the highest possible standards and a higher duty of care than any other financial service.
“And it’s not good enough to have self regulation, it’s not good enough to have best practice. These things should be enshrined in law. We should be saying now, our superannuation sector – which is compulsory, and is a fundamental driver of our economy and will only become a more fundamental driver of our economy – has to have beyond the best practice. It must be world’s best-practice regulation.”
David Whiteley will be appearing at the 2011 FPA National Conference at the Brisbane Convention and Exhibition Centre on November 16-18. Registration discounts are available prior to September 30.
