Are you ready to take a pay cut?

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During the discussion panel at the ASIC Forum this week, Australian Super chief executive Ian Silk called for higher standards in the superannuation industry, and suggested that some people in the industry were taking more than their cut.

While he said that conduct across the industry was “generally pretty good”, there were still people who “clip the ticket here, and clip the ticket there”.

“Remuneration is manifestly excessive as a general proposition throughout this industry and yet we’re all sucking on the teats of the public purse, in a sense,” said Silk.

ABC News reported from the conference that Caltex chairman and Westpac director Elizabeth Bryan also said the industry was charging “boom-time fees”.

"I come from Ian's position where I think we are an industry that lives off a legislative requirement for people to give us their money, so we do owe a duty of care, we owe a high duty of care," she said.

Association of Superannuation Funds Australia (ASFA) CEO Pauline Vamos attended the forum, and said that over the past year there had been a substantial review of fees and a lot of recalibration. “What Ian was saying is that when you had double returns everybody made money. Now you’re in a time – and a time which will continue – of a low investment return environment, so everybody’s expectations need to change.”

The key thing for planners to remember, says Vamos, is that the days of being able to pull out 350bps, 250bps, 150bps, have long gone. “Every single adviser/provider in the value chain must be able to articulate very clearly the value they are providing and how their compensation reflects that value. That is going to be the difference.”

More stories:

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  • Mark Phillpot on 29/03/2013 8:33:13 AM

    This is double standards. Ian and Elizabeth are getting hefty salaries. How is that benefiting members? We Planners help clients to maintain their lifestyles and goals and We deserve more respect. I feel we are being targeted too much and if allowed they would have blamed GFC on us

  • PETER CORRIE on 28/03/2013 7:16:25 PM

    These off the cuff statements by Ian Silk and others is typical of people who have never been advisers and never likely to be.The Labor gov't and FOFA'S regulations and red tape have reduced incentive and our income considerably and will drive many advisers away from SUPER almost entirely.In addition we have been hoodwinked into believing that commission on Super is a bad thing.
    The whole political arrangements of centralized controls and standardization of Super are socialist and anti businesses practices and will guarantee less competition ,production and employment.
    September cannot come quick enough.

  • Neil on 28/03/2013 2:46:23 PM

    $600,000?! Ian obviously has no shame. Neither does Liz.
    I am in the process of contact them now.

  • Robert on 28/03/2013 10:52:37 AM

    Based on the latest annual reports, Elizabeth Bryan gets director's fees of $500,000 from Caltex and $210,000 from Westpac - she is in no position to lecture to anyone.

    And when are former lawyers Julia Gillard and Bill Shorten going to reform the legal industry? No financial adviser in the country charges $500 for a 5 minute phone call.

  • Paul on 28/03/2013 10:27:10 AM

    Does Ian mean the $600k+ he is being paid is too much too ?

  • Another Adviser on 28/03/2013 10:24:52 AM

    Higher standards in the Superannuation Industry he says but in fact is referring to Advisers so it seems.

    As Peter says if the clients are paying for the service they are receiving and are fully aware of the fee there's no issue.

    In actual fact I believe generally ongoing fee propositions are not the issue but upfront fees being charged for transactional advice. I had a client come to me recently to see if I could assist with a UK Pension Transfer, he had $1Mill and had been quoted $35,000 (absolutely insane) and BTW this was a major Bank (boom time fees indeed).

  • Tony on 28/03/2013 10:13:13 AM

    For 2011/2012 Ian Silk's salary was close to $600,000 and the administration & operating expenses was a whooping $172 million. For a fund that is supposed to benefit only the members, I find this hard to swallow. Yes, I agree with Ian that some people in the industry are taking more than their cut!

  • Neil on 28/03/2013 10:11:26 AM

    Sorry Peter, I don't agree and I am a planner also. Have been for 12 years.
    How much does Ian get paid. How much value does he add!
    Get real, he has alterior motives. Always has always will. What I get paid is my business and nobody elses. The last time I looked we were not living in Soviet Russia.
    God I hate this clap trap.

  • Fedup on 28/03/2013 9:41:20 AM

    He and his mates are giving it a decent suck themselves, with very little value add.

  • Peter on 28/03/2013 9:37:52 AM

    I am adviser and I have to agree with Ian's statement. Where you have a strong value proposition and the client fully understands what they are paying for then the relationship can be beneficial to the client first and then the adviser. Lets not forget clients are much better informed today. Seller beware not buyer beware any longer

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