Financial planning becomes a political battleground

The use by Industry Super Network (ISN) of research and surveying organisations to help prosecute its agenda with respect to financial planning represents the transfer of long-standing political campaign techniques to the financial services arena.

Retaining reputable research and surveying companies to undertake a project to a specific brief is not an inexpensive exercise. Companies such as Newspoll, Roy Morgan, Rice Warner and even Rainmaker do not come cheap.

In the past four years, the Industry Super Network (ISN) has used each of the aforementioned research and surveying organisations to undertake projects the results of which have been utilised in prosecuting the ISN’s agenda with respect to the financial planning industry.

On each occasion, once the research results have been provided to the ISN they have been disseminated to the media and various industry stakeholders in a fashion which has, more often than not, caused a good deal of consternation in the financial planning community.

Such was the case last week when ISN chief executive David Whiteley used research his organisation had commissioned from Rainmaker to claim $3 billion was paid in commissions by retail superannuation fund members last year – something which would justify the Government legislating to tip them all into no-commission MySuper arrangements.

Putting aside the aggravation inflicted on financial planners, the ISN’s expenditure on research and the statements thereafter issued by Whiteley have to be seen for what they really are – the transfer of long-standing political campaign techniques to the financial services arena.

The strategy of commissioning highly specific research from reputable companies and utilising it to underpin a particular agenda has been the stock in trade of lobbyists and political operatives for decades. The reputation of the research or surveying company delivers an aura of credibility, while a close examination of the findings speaks volumes about the brief to which they worked.

The cost of such exercises normally limits the degree to which they are utilised. The number of times the ISN has commissioned such research suggests it feels no such financial constraints.

If it costs a good deal of money to commission the research, then arguably, it can cost both time and money to appropriately counter the conclusions which are then reached.

Take, for instance, the recent Roy Morgan (Retirement Planning Report) commissioned by the ISN which stated that 72 per cent of retail super fund members did not have regular communication with their adviser and asserted that “the vast majority of these members are likely to be paying ongoing advice fees or commissions”.

It might have been counter-argued that these findings are misleading, simply because advice sought and fees paid are discretionary and contemporary retail products such as BT Super for Life, Colonial First State’s FirstChoice, and AMP Flexible Super do not have commission structures.

Those who closely examined the Rainmaker research might just as easily have pointed to the fact that had the scope of its research been extended, it might have referenced the manner in which industry funds were remunerated when large group life insurance mandates are awarded.

Research and surveying companies are like barristers. They carry out their task consistent with their terms of engagement and a brief dictated by their client.