Deen Sanders
A prolonged campaign of negative media coverage on the total value of commissions paid to financial planners has solidified planner support behind the Financial Planning Association (FPA) in demanding the Federal Government adopt an accurate statistical base before embarking on any review of superannuation costs.
At the same time, the negative media coverage has given rise to expressions of concern about perceived conflicts of interest based on reports that major publishing house Fairfax Media, which publishes the Australian Financial Review (AFR) and Sydney Morning Herald, also owns direct funds brokerage house InvestSmart, which is arguing for commission rebates by planners.
After three weeks of negative reports relating to the role of financial planners in superannuation, the deputy chief executive of the FPA, Deen Sanders, felt compelled to write to the AFR complaining of bias and referring to “expensive campaigns of advertising and media management funded by product providers”.
Sanders told Money Management that what was of most concern to the FPA about the negative media coverage was that it was based, for the most part, on data that he believed to be flawed, such as modelling suggesting that the financial services industry is a $310 billion revenue sector.
“Our problem with that figure is that we believe it is the product of a lot of misalignment and double and triple counting,” he said. “And we are also concerned that there is acceptance that financial planners could be taking 1.25 per cent of that figure in fees and commissions.”
Sanders acknowledged that, in a broader context, there were members of the FPA who had expressed concern that a number of media commentators were beginning to adopt positions that could be perceived as being tantamount to the provision of advice.
“That is not something I want to get into, but that is something that is being openly discussed by a number of our members,” he said.
Sanders said that before the Government could embark on a serious analysis of the actual costs associated with superannuation, it needed to ensure that the data from which it would be working was accurate, which is currently not the case.
“What we’ve been saying to the Government is ‘let’s get a real fix on the numbers first’,” he said. “We will be doing our bit but so too must the rest of the industry.”
