While super funds attempt to broaden their relationships with financial advisers, the key item to improve is having a consistent standard between all disclosure documents.
In a panel discussion at the Professional Planner Researcher Forum in Sydney, Wealth Advice principal Marisa Broome said standardisation for fee consent and other disclosure documents between the funds is the most pressing issue advisers have with the profit-for-member funds.
“A big shout out to Ben Marshan [head of policy] at the FPA, when we could see the annual fee consent issue come into play he called out to all the big funds and said we need standardisation,” Broome, who was previously chair of the Financial Planning Association, said.
The FPA attempted to have super funds push back on fee consent implementation before the regime started and have continued to campaign for better standardisation.
The FPA and Financial Services Council paired up in 2017 to create guidance for advisers and product producers to manage customer due diligence obligations under the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act.
Broome said this model was what should have happened during the implementation of the fee consent regime, but added no one else was interested at the time.
“When the former Federal Treasurer had to sign 32 pieces of paper to have fee consent put into place by one of my peers, he realised they had some real problems with standardisation of fee consent,” Broome said.
She added there needs to be more co-operation across the super funds, the Association of Superannuation Funds of Australia and the FSC to work together to get consistency across fee consent.
“When we first went through that fee cap/fee consent issue a lot of funds wanted to see that statement of advice to make sure the advice was appropriate until we [the FPA] pointed out to them that would make them a judge about whether advice was appropriate or not,” Broome said.
“They all run in the other direction once they realised they might have been liable for the advice.”
Qualitative information required
When it comes to data and research that advisers need, Broome said she has plenty of options for quantitative data but there is a pressing need for qualitative information.
“When I look at the research I am buying and making considered choices for my clients, I want to look at different qualitative data,” Broome said.
“That can be different from what the big players offer in the market; some are better than others.”
Broome said it’s “bloody hard” to get information out of certain super funds.
“Everyone wants something different for me to actually be the authorised adviser on the account. There’s been some challenges but within our practice we put the client first,” Broome said.
Broome said if the client has a relationship with the fund and it’s good for the client to be in it for the long-term then her business will work around that knowing there will be a cost to do so.
“It can be done better but we’re getting there,” Broome said.
Researching the profit-for-member funds
Morningstar currently has only a few profit-for-member funds under its research coverage: Australian Super, Australian Retirement Trust and Cbus.
“We have been actively discussing more funds under coverage – a large super fund reached out saying they needed coverage from an adviser perspective,” Morningstar director of manager research ratings Annika Bradley said.
“We’ve also had a handful discussions with some of the other larger funds because larger advice businesses and more of our investors and clients are saying they need a view on these funds. There’s a huge share of wallet going into them so it’s important there’s a view out there.”
Dealing with valuing unlisted assets has been a point of contention in the industry and Bradley said researchers have to dig into what the various valuation policies are.
“We want to understand how it works through in practice,” Bradley said.
“In my sample size of three, we are seeing there are different ways of dealing with assets and we called out one of the funds to say they took a prudent approach pre-30 June… if that’s not consistent across the industry they’ve voluntarily disadvantaged themselves from a 30 June perspective.”
AustralianSuper national manager for adviser partnerships Carson McNamara noted advisers have been curious about unlisted assets and are seeking more information.
“We trialed a few things and what we found is the curiosity around particular assets is there so if we can provide some case studies and breakdown why we see a particular asset as being valuable… we find those clients want to use those stories with their clients, so they have confidence,” McNamara said.
Super advice
McNamara said for AustralianSuper advice is an important aspect of the fund’s overall offers but there is a strong focus on the value it provides for Australians.
“There’s not enough Australians seeking advice at the moment,” McNamara said. “We have our own internal financial advisers but with over 2 million members in every corner of the country, we can’t possibly service the advice needs of that membership.”
“The external advice channel is important [to the fund], because we want to make sure advice is accessible and in order to be accessible we need to make sure that advisers have the right information on us, that they confidence in us – not just the investment solutions… but all components.”
