The financial advice system has become less “polluted and corrupted” with the phasing out of legacy commissions and there is now no reason industry funds should distrust financial advisers according to Industry Fund Services founding executive chair Garry Weaven.
Considered one of the architects of the superannuation system and a leader of the industry fund movement, Weaven said at the time the industry funds launched the advice profession had no chance of creating a professional identify.
“My problem [wasn’t] that there weren’t good people in advice, or that advice wasn’t necessary, but that the system was so polluted and corrupted by the commission system,” Weaven said during the Professional Planner Licensee Summit “Legend Series”.
Weaven said the sooner the industry was freed from a system of conflicted remuneration, the better.
“Industry funds from day one said they wouldn’t take commissions. Yes, we had award systems and industrial agreements and that’s true. We were able to deliver a wholesale product without commissions but we maintained that stance throughout.”
With the worst of the conflicted payments now ruled out, he continued, there’s no reason for industry funds or anyone else to distrust the planning industry.
“Of course, you’re going to distrust them if you see a financial incentive to take business away from you and give it someone else. Once that fundamental conflict is removed it’s completely reversed.”
Untold wealth
Weaven detailed a time he addressed “something called the Life Underwriters Association” in Queensland in the ‘80s and the trepidation they had towards the industry funds.
“I thought ‘this will be good, they’ll be doing life underwriting’ but they weren’t, they were insurance salesmen. They had all these dire prognostications about how industry funds were going to be the ruin of the nation of their business.”
Weaven tried to convince them the superannuation movement would create “untold wealth”, but only if they followed through on one condition.
“This whole super movement is going to create untold wealth for you to advise about for those of you who lift your game and be qualified to advise on wealth rather than sell policies for commission.”
Exceeded expectations
Weaven wasn’t shy in his excitement that the superannuation industry and industry funds have surpassed his own expectations.
“In the start of the ‘80s there was $50 billion; that was the total industry. Today it’s $3.5 trillion. I’m no actuary but I reckon by the start of the ‘30s it’s going to be $6 trillion. If I’m wrong just wait a year.”
