Industry super warns members off other advisers

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Members of $1.9 billion industry fund First Super have been warned not to take advice from financial advisers not aligned with the fund.

The fund's co-chairmen, Construction Forestry Mining & Energy Union national secretary Michael O'Connor and Timber Trade Industrial Association president Allan Stewart suggested to members – in the fund’s annual report – that bank-aligned financial planners do not put their interests first.

“One issue that most concerns us is the market presence of financial planners who advise people to invest in superannuation and retirement products that are more expensive – and potentially less beneficial – than ours.

“If you’re offered a session with a financial planner by your bank or other financial institution, be mindful of their possible motivations and payment structures,” they wrote.

Members were reminded they could talk to a First Super-aligned financial adviser for free.

But Financial Planning Association chief executive Mark Rantall says there is no justification for suggesting financial planners not aligned with the fund would not put clients’ interests first.

“The issue is clearly First Super have set up relationships with financial advisers who are aligned directly with the fund. For them to say other financial advisers would not give appropriate advice is not correct.

“Australian financial planners have a legal obligation to their clients to act in their best interests, and they do a fantastic job.”

Rantall encourages consumers to seek out the advice of financial planners who are FPA members, as they are qualified to the highest level and bound by the Code of Professional Practice.

First Super manages $1.9 billion in member funds for more than 72,000 members in the timber, pulp and paper, and furniture and joinery industries. Its balanced fund returned 13.59% over 2013.

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  • Garry on 18/11/2013 10:10:57 AM

    Typical of union based control, why does First State super want more independence from union control. Their aligned planners have a vested interest in keeping members even if a move was in best interest.
    Best interest does not always mean better off financially, there are other areas of lifestyle and estate planning and budgeting.
    We all provide first meeting free and then set charges for ongoing advice.

    Do aligned planners provide free claim service.

  • Jason on 18/11/2013 10:11:19 AM

    All advisers aligned with any product whether they be bank, industry fund or other should come with a buyer beware sticker. Recommending use of or retention of related party products is conflicted so the First Super comments are correct although they apply equally to their own advisers. Where advisers are primarily paid form aligned products then clients should consider the advice very carefully but equally when advice is described as "free" it is more likely to be conflicted. The fact product provider profess such expertise in where to get good advice says it all.....

  • Ben CFP on 18/11/2013 10:22:58 AM

    What a disgrace! Yes I am sure the so called aligned advisers will recommend 'other' funds if appropriate.......not. I would not be surprised to learn that these so called aligned advisers receive payment from FirstSuper otherwise how do they get paid? Don't tell me, they work for free. This is just a blatant shot to ensure their advisers get their cut and they keep as many members as they can. I hope they are all members of the FPA and are CFP's and abide by the FPA's code of conduct and the government's Best Interest policies. FirstSuper need to be investigated based on these comments, as all I see is them looking after their best interests not necessarily their member's best interests.

  • Alistair on 18/11/2013 10:23:14 AM

    Here we go again. Another moron from the ISN suggesting that the ISN planner will look after them and advise on their fund. Exactly whose best interest is the fund trying to protect. Theirs, not the client.
    As an FP, this is just another disgusting stance and is more reason why funds should remain as the manufacturer competing for market share based on product design and advisers should be advisers acting in the best interest of the client.
    If the product suits the client regardless of an ISN fund or a Bank fund or a life office fund or even an SMSF. Then so be it. This would ensure best interest TO THE CLIENT is maintained.
    This clown from the ISN should find something else to do with his life instead of interfering in the welfare of his members.
    By the way, how about the government use CORPORATIONS LAW to enforce trustees to act in the best interest of their members. Yeah that sounds like a fine idea. Oh and how about prosecuting them for breaches including both monetary and jail.
    That way the past goings on within the funds like MTAA and the Meat Industry Super Fund and their "Trustees" will come to light and be dealt with properly. Sounds mighty fine to me.
    I as an FP am sick and tired of morons like this besmirching our industry for their own sake. Government please hear our plea.
    To paraphrase the sentiment of Bill Clinton in his 1992 election slogan.
    Its the client stupid!!!!

  • Chester on 18/11/2013 10:39:20 AM

    I think the title and text are on different planes. The title refers warns off getting advice from other advisers in general yet the text refers to a warning of bank aligned advisers, quite different pictures.
    Bank aligned we all know the stories, here it states almost a semi informed view get advice but not bank aligned , which doesn't sound all that bad coming from a IFP point of view

  • Alexis Wheatley on 18/11/2013 11:10:09 AM

    This is an extremely disappointing but unsurprising comment. I recently provided advice for a client to consolidate to an industry fund. The advice was initial advice and only related to superannuation. The fund allows their aligned planners to charge the member's superannuation account and hence receive a tax deduction. However, it does not provide the same benefit to members of the fund using unaligned financial planners. The trustee behaviour is clearly not in the best interests of members.

  • Liam on 18/11/2013 11:10:54 AM

    72,000 members in the Timber, pulp and paper, and furniture and joinery industries! I would be recommending they see a career adviser first, in light of the current rate of decline in those industries

  • Josh on 18/11/2013 11:12:24 AM

    Once again it's a race to the bottom by the industry funds. Unfortunately the 'cheaper is better' theme continues to resonate with consumers, despite it having no substance. That said, I'm happy to work with clients who are engaged in the financial aspects of thier life, are not 'mandated' to have their money with me, and understand the benefits of professional advisory relationship.

  • Michael on 18/11/2013 11:51:22 AM

    Mark Rantall would have been effective had be kept to the subject and pointed out that any non-aligned adviser would have more credibility than an aligned one. ISN or institution. All he did was turn it into a ISN/FPA turf war.There are plenty of non-aligned advisers in the FPA but the issue with recognising that increased level of impartiality is that it diseffects the majority of FPA members who are aligned. All gets back to the same issue, you either provide product or distribute, doing both simply opens the door to potential conflict.

  • jack cfp on 18/11/2013 1:29:06 PM

    Chester, you must be the best, most etical and professional self employed financial planner in this country. We are all proud of you!!

  • chris on 18/11/2013 2:05:05 PM

    So Mr O'Connor is advocating that clients see advisers that only provide advise on one product across one tax structure and across one set of insurance ,to bad if a client needs something outside such a narrow and biased product range .So much for giving un biased advice,owe so tell me again why we provide a clients with a FSG and why after years of lobbying ,commission on investment products have gone ,I thouight it was about transparency and to tale away commission bias ,either the leislation is wrong or not working or MR O'Connor is simply trying to protect his job isn,t that a bias.

  • James Smith on 18/11/2013 2:32:26 PM

    O'Connor how do you assess the quality of your First State Super aligned advisers ? Who is responsible if their advice is proven to be insufficiently comprehensive despite the member being given an expectation that they have had all relevant matters addressed ? eg how many members were advised to switch to cash at the bottom of the market and at what cost to their account balance? were insurance and Centrelink related issues adequately explored and addressed ? In response to this letter isn't it reasonable to expect that ASIC would review the advice provided by First State aligned advisers to back up these claims ? Isn't it also reasonable to hold the likes of O'Connor responsible if they have been proven to overstate the quality of advice provided ?

  • carl on 19/11/2013 11:43:56 AM

    Why does anyone take notice of these jokers? Why should they not be under the same obligations of putting the interest of their members, first? they betray their non belief in the system prior and since Fofa by saying what they have. Let's put them under scrutiny to justify their earnings.

  • Melinda Houghton on 19/03/2014 10:38:44 AM

    I recently provided advice to a client who had already paid the ISN for a plan. The "advice" they received? Rollover to the Industry Super Fund pension. The cost $2,200.
    Our advice? Restructure assets to maximise Age Pension entitlements, change asset allocation, new fund at same cost with transparent well performing funds, full projections for retirement giving peace of mind on income needs - an additional income of $4,400 pa for 10 years until spouse became eligible for Age Pension. Our fee $2,200.
    Compare the pair!

  • Garry on 19/03/2014 11:17:22 AM

    The FPA is as bad as the ISN in stating that the public should only deal with with them as they have the best advisers , I am sure 99% of advisers adhere to a code of ethics, it is all about growing member numbers.
    The AFA and others all have same outcome to give the public reliable professional advice. Lets all pull together with a united front and stop wasting energy.

  • Innocent Observer on 19/03/2014 3:08:27 PM

    Quite right, @Garry.

  • Let's Get Real on 19/03/2014 3:30:21 PM

    Liam, now thats real planning...gold! Thought the same as you on that front.

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