Misha Schubert

Dear Super Members Council: 2010 called and it wants its talking points back.

On the eve of an important parliamentary hearing on the Delivering Better Financial Outcomes bill, the SMC’s inaugural chief executive Misha Schubert, has thrown a grenade into the financial advice reform process that could trigger a lot of post-traumatic stress in the profession.

“Dodgy advisers are using clickbait-style social media posts, cold calls and high-pressure tactics to convince people to change super funds,” Schubert told The Australian newspaper on Wednesday.

“Super fund members are then charged a massive advice fee and plonked into a poorer performing super product. This predatory practice needs to end.”

The comment is a reference to ASIC’s curiously timed report last month exposing “high-pressure cold-calling tactics and social media clickbait leading to superannuation switching”.

But Schubert seems to be either deliberately or mistakenly conflating registered advisers with the activity of unregulated spruikers.

ASIC’s report attributes this “dodgy” activity not to advisers but to a handful of “cold calling businesses” and “clickbait advertisers”. It goes on to suggest that these unscrupulous players in some cases had referral arrangements in place with a “small subset of financial advisers” – so small in fact that no number is given in two separate media releases and a report on the matter.

There are myriad reasons why an adviser may recommend a client switch to a different super fund – even an ostensibly “poorer performing” one – including tax considerations and the client’s own personal goals and values (which, ordinarily, the adviser is privy to frankly and the trustee is not).

But ASIC does add the caveat that the activity in question should “not be confused with legitimate contact by financial advisers and superannuation trustees in the course of providing financial services to their existing clients”.

So, assuming the conduct in question is indeed predatory and harmful, the regulator is of course right to police and stamp out this criminal or at least unscrupulous behaviour.

But that doesn’t excuse the SMC’s misjudgement in jumping on and misrepresenting ASIC’s findings.

The seemingly broad and blasé reference to “dodgy advisers” will be triggering to many in the advice community, who have hard-won their professional status through a decade of upskilling and reforming their remuneration and business models.

The association for not-for-profit super funds would no doubt take issue with its members all being tarred with the brush of a “small subset” of trustees on the fringes of the super sector, so why is it different – always – for advisers?

It smacks of pre-royal commission narratives, and pays little heed to the work done by the whole industry to lift standards. It reverts the narrative to talking points of the militant Industry Super Australia of yesteryear, rather than the new peak body for major super funds – most of whom have been at great pains to end the acrimony and work more collaboratively with external advisers, developing better digital portals and advertising on websites like Professional Planner.

Moreover, it is an unhelpful and somewhat bizarre line to run in the press for an organisation that will also be prosecuting the case in coming months for the government to implement Stream 2 of the Quality of Advice Review reforms, pertaining to super advice.

If even professional advisers are “dodgy”, why would the Parliament or voting public even entertain the notion of any deregulation – let alone permitting a new class of less educated and likely conflicted “qualified advisers” to emerge?

The comments as reported also seemed to reveal the SMC’s hand on the contentious issue of advice fee deductions. “Vital consumer protections that obligate super funds to check the appropriateness of advice charged from super funds need to be swiftly legislated and not delayed or changed,” Schubert said.

The SMC has previously said the bill as drafted only clarifies the existing provisions in the SIS Act, it doesn’t meaningfully amend them. If that is the case, why is it so imperative that the new provisions be legislated?

The comments will fuel criticism that the DBFO bill clandestinely and meaningfully changes the law around fee deductions, placing new obligations on both trustees and advisers. Some stakeholders have hypothesised that the changes to Section 99FA, which were not recommended by Michelle Levy in her QAR, could have been influenced or even drafted by ASIC.

They comments may also be construed (or perhaps misconstrued) as suggesting that trustees should check every piece of advice, which ASIC has repeatedly said is not necessary but is causing some angst nonetheless.

In a subsequent media release, the SMC at least acknowledged the behaviour in question pertained to a “small subset” of advisers, and drew a distinction between these individuals and the broader profession. To that end, it may have intended to impugn all 16,000 registered advisers, many of whom are these days key allies and clients of its members.

But words matter, and following a multi-decade ‘super war’ and amid a highly fraught legislative reform project, all stakeholders should choose them wisely.

3 comments on “Super lobby shatters fragile truce with advisers”
    Avatar
    Chris Cornish

    The real concern is her attempt to link some “advisors” doing tele-sales with the grab for power that industry funds seem to want.
    When a member has retired, they should be able to use THEIR money how they see fit. But now the industry funds want to control that.
    From her comments, it is clear that industry funds want to control how retiree make payments . Dictating and controlling whether pension accounts can pay advisers is the first step towards industry funds dictating what other payments they deem ‘permissible’ and ‘authorised’.

    Avatar
    Michael O'Hara

    If this is the way the Super Members Council views advisers then again, there is little practical point in using the term ‘professional’ for financial advisers.

    No other profession has its ridiculously regulated recommendations overseen, checked and audited at the level endured by financial advisers.

    I’m not aware of any other profession that forces a professional to sign up with a major institution to provide services. It’s as if the financial adviser system itself has been set up to distort financial advice towards large institutions.

    I take comments such as those of MIsha Schubert as a personal afront. They lack justification and they smack of uneducated opinion and outright bias.

    Australia’s financial advice regulatory system is a farce. Our licensing system embeds bias. QAR will simply exacerbate this. The Statement of Advice requirements and process are the biggest impediment to offering affordable, accessible and appropriate advice to the greater Australian public. Yet observations such as those of Misha Schubert are an obstacle to allowing advisers to just get on with their job.

    We advisers have developed very thick skins over the past 15 or so years, and we’ve emerged from other people’s super wars as a group of knowledgeable, capable but highly cynical actors in this heavily fought arena. But it doesn’t mean we don’t notice the continuation of recalcitrant and vindictive behaviour of those who utilise positions of authority to rain a shower of abuse on advisers.

    Avatar
    Michael O'Hara

    If this is the way the Super Members Council views advisers then again, there is little practical point in using the term ‘professional’ for financial advisers. No other profession has its recommendations overseen, checked, audited and

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