…as embattled advisers watch super funds start their own planning arms
Independent advisers are coming under growing pressure as several industry funds look to setting up their own financial planning bodies.
Equipsuper general manager Ian Ramsay has confirmed the group plans to set up a financial planning arm.
"We haven't formalised anything at this stage, but it will come up at a board meeting very soon," he says.
The fund currently uses Mercers for financial planning and pays no commission for the service.
SunSuper is to form a financial planning arm to provide investment advice to its 500,000 members, says chief executive officer Don Luke.
Queensland Coal Super secretary Ian Harcla says the fund is looking for external advisers initially to see how outsourcing works.
"We are negotiating with a short-list of financial advisers, but this move will be assessed in the future. If we are not happy, we will then look at providing internal advisers," he says.
Consultant Grant Abbott says the financial planning industry is slow in reacting to the impact of these moves.
"A lot of independent planners are reliant on rollovers. If these are going to be looked after in-house, then their work will dry up," he says.
Member choice is driving the move for superannuation funds to set up financial planning operations. All of the fundsMoney Managementcontacted say they are getting requests for advice from members every day.
Catholic Superannuation Fund secretary Joe Farrugia says his organisation had contracted Industry Fund Services to provide some financial planning advice through seminars.
"We are at the next stage of thinking what we will do, but I don't think we will get a licence," says Farrugia.
"We will probably use the services of an organisation like IFS to give members advice."
IFS already provides full financial planning services to 12 funds.
Abbott says the issue facing planners is client ownership and that the superannuation funds have a good relationship with their members.
"They have an advantage. Their members are looking for a one-stop-shop approach," he says.
With funds often offering these services for free or on a fee-for-service basis, independent planners are going to find themselves in a price war.
"Industry funds have the reserves to offer these services on this basis, so the financial planning industry is going to go through a big shift as the impact of these funds hits," Abbott says.
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