It’s about time the financial planning profession lost the chip on its shoulder about industry superannuation funds. An “industry funds are anti-advice” mentality still seems to exist, despite the inconvenient facts that industry funds a) have never opposed advice, they only opposed commissions and other conflicts; and b) industry funds have built financial planning businesses that are among the very best in the country.
It would be a most peculiar business strategy to build a business that you both opposed and were seeking actively to destroy. Even so, Professional Planner was taken to task on this issue this week in response to an article that suggested infighting between members of associations and between associations themselves might be undermining public confidence and trust in financial planning and financial planners.
Not so, apparently – the problem is that industry funds have “skilfully told” the public “not to trust” financial planners over the years; and Professional Planner has failed to “challenge them” on it. I am, “after all, just a journalist and have never been a financial planner.”
But challenge them on what? On opposing commissions paid to financial advisers? On opposing conflicts of interest? If anyone seriously expects Professional Planner to challenge opposition to structural corruption in financial planning then they may have misunderstood what we do and why we do it.
In the October edition of the magazine we examine how a number of major superannuation funds have built powerful, professional and highly engaging financial planning propositions, and how they are delivering them to members.
What they are doing puts a significant portion of the general planning community in the shade.
Fighting a non-existent enemy
But more than that, while some financial planners continue to fight yesteryear’s battles against an enemy that was non-existent in the first place, the funds have gone ahead anyway and built advice businesses and effectively constructed high walls around their members. Three funds alone have more than five million members between them and if these funds continue to offer a solid, integrated and non-conflicted advice service to five million people, that’s five million people who won’t go knocking on the doors of other financial planners seeking guidance and advice. These are not insignificant clients, ether. During the research for the magazine article one fund revealed it had recently had a client worth $15 million roll into its advice service. And figures from APRA show it’s not unusual for these funds’ members to reach retirement with well over $200,000 in their account.
And in any case, industry funds do refer members to financial planners. Look at the FPA’s Professional Practice referral partnership. Look at how these practices have developed solid and valuable relationships with industry funds. Look at how industry funds have embraced these partnerships. Explain again how industry funds are “anti-advice”?
There are plenty of reasons to not like industry funds – you could point out poor administration or political/ideological issues, to cite just two examples – but suggesting that industry funds are anti-advice and that they do not recognise the value of financial planning just isn’t borne out by the facts and their actions.
To sheet home the blame for the public’s mistrust of financial planning to a fundamental misunderstanding of an outdated advertising campaign, and to blame the media for not pursuing an non-existent story, demonstrates an unwillingness or an inability to face up to reality.
