Broaden definition of advice subsidy: Bissaker.
Brian Bissaker
The provision of financial advice with respect to superannuation is consistent with the intention of the sole purpose test because when you get advice you maximise the benefit to yourself, according to the chief executive of Colonial First State (CFS), Brian Bissaker.
Participating in a debate at the Investment and Financial Services Association national conference on the Gold Coast, Bissaker also suggested that the industry funds were adopting too narrow a view of the question of product manufacturers “subsidising” advice, whether it was by way of commissions or by payment of fees.
“Advice subsidies come in many forms — commissions is one, and actually hiring internal planners is another, and whenever there is subsidisation there is potential for conflict,” he said.
“But is that bad? No, because it gives people access to advice at a reasonable price. There needs to be a recognition that there is subsidisation of advice going on and it is not all bad.”
The chief executive of major industry superannuation fund Australian Super, Ian Silk, had earlier told the conference that he believed that the absence of commission represented one of the major reasons why financial planners often did not recommend industry funds.
Silk said that while he believed people should be able to use their superannuation balances to pay for advice, he believed that advice needed to be superannuation-related.
Bissaker also suggested that while CFS had been busy within its call centres dealing with the negative returns generated in superannuation funds over the past 12 months, he said much of that activity had now dissipated and this was due, in part, to the heavy involvement of financial planners in reassuring clients.
Silk acknowledged that, as an industry fund, Australian Super had not enjoyed the benefit of the “firewall” provided by adviser involvement.
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