Financial Services Council and Industry Super Network – strange bedfellows?

There were some raised eyebrows when Financial Services Council chief executive John Brogden announced his organisation would be developing policy with the Industry Super Network but, as Mike Taylor writes, there are other marriages of convenience which could generate louder policy voices. 

In the space of less than 18 months the Industry Super Network (ISN) has cut two deals with major organisations representing the retail financial services industry – first with the Financial Planning Association (FPA) in 2012 around Future of Financial Advice (FOFA) changes, and this month with the Financial Services Council (FSC) around superannuation policy. 

Given that the ISN was established in 2006 as an offshoot of Industry Fund Services (IFS), it is worth noting that today it has morphed to a stage where it is operating as a stand-alone company registered as Industry Super Network Pty Ltd with the Australian Securities and Investments Commission (ASIC). 

But it is important to recognise that ISN’s registration as a stand-alone company only occurred in May 2012, shortly after it had cut its controversial deal with the FPA. 

For its part, ISN describes itself as having been formed in 2006 via its “founding entity”, Industry Fund Services led by Garry Weaven. 

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It notes that, together, ISN and IFS “have played a key role in shaping the retirement savings debate over the last 25 years”. 

For its part, IFS describes itself as “the leading provider of financial product and advice services to industry super funds and union members”. 

“Established over 15 years ago, we are wholly owned by a number of industry super funds and operate on the principle of ‘in members’ best interest’.

"Our products and services are market leading and we focus on providing affordable, innovative solutions to your financial needs and goals.” 

While the political nature of the FOFA changes and the lobbying role performed by ISN made it logical that it would negotiate with the FPA last year, the announcement of a superannuation policy relationship with the FSC was less predictable because of the existence of the Australian Institute of Superannuation Trustees (AIST). 

While the ISN was always seen as the lobbying arm of Industry Funds Services, the AIST is regarded as the established representative organisation for the broader not-for-profit superannuation fund sector. Further, it offers what the ISN does not – education. 

While ISN now holds status as a Pty Ltd company in its own right, a number of its directors are also directors of IFS, most notably Garry Weaven.

However there is only one director of the AIST on the advisory council to ISN: HESTA trustee director and Victorian Employers’ Chamber of Commerce and Industry nominee, Angela Emslie, although documentation dating from 2009 reveals ISN chief executive David Whiteley as being an AIST director. 

While ISN has done much of the lobbying around policy issues such as FOFA and Stronger Super, AIST, not unlike the Association of Superannuation Funds of Australia (ASFA), makes clear that it sees itself as having an ongoing role in terms of policy formulation and debate. 

The AIST web site states: “As Australia’s leading representative body for the not-for-profit superannuation industry, the Australian Institute of Superannuation Trustees supports our members through events, compliance, advocacy, policy development, research and education”. 

It is not clear where either AIST or ASFA will stand in terms of the policy development arrangements entered into between the FSC and the ISN, but ASFA chief executive Pauline Vamos made it abundantly clear that she did not intend to be excluded from the broader debate. 

Within hours of FSC chief executive John Brogden and ISN chief executive David Whiteley announcing their arrangements at the FSC annual conference in Brisbane, Vamos issued a statement announcing the convening of an industry-wide forum to discuss superannuation policy. 

Her announcement left few in any doubt that Vamos believed that ASFA could not afford to be left out of the debate. 

“For over 50 years, ASFA has brought all sectors of superannuation together to deliver outcomes that are in the best interests of fund members. For some time now we have been advocating for other industry bodies to work together, particularly when it comes to the big picture issues in superannuation. 

“We are heartened by the announcement from the Financial Services Council and the Industry Super Network today that they are ending their public skirmishes and intend to work together in the interests of fund members. 

“As a result we feel that the stage is set for the next level of collaboration amongst all interested parties, from the larger funds that they represent through to smaller funds, SMSFs, financial planners, actuaries, investment consultants and many more.” 

ASFA will be writing to all stakeholders to convene this forum, which will act as a clearing house for policy discussion. 

“It’s important the industry shows policy makers and the community that it can work together to ensure our superannuation system is sustainable now and into the future, and delivers an adequate income for all Australians to live a comfortable retirement,” Vamos said. 

AIST chief executive Tom Garcia did not reveal his views of the arrangement between the ISN and the FSC, but like Vamos he cannot afford to allow his organisation to be excluded from industry-wide policy formulation. 

Between them, ASFA and the AIST boast more paid-up members than the ISN or the FSC. Combined, their voice on policy would become undeniable.