Financial planners enlist union aid in pay dispute
Financialplanners with the Chifley Financial Services group will head to the Industrial Relations Commission after unions threw their full support behind the planners in a dispute with Chifley over commission payments.
The planners, represented by the Finance Sector Union (FSU), were late last week given the unanimous support of the Labour Council, the peak union body in NSW, to make the move to arbitration to resolve the dispute.
The Labour Council secretary, John Robertson, says its support is not in any way unusual despite the fact that the council is a one-third stakeholder in Chifley, as the issues were significant and should be dealt with on a more public level.
According to the planners and the FSU, Chifley chief executive Brett Westbrook wrote to each planner in late April and said Chifley would unilaterally remove all commission payments to advisers, leaving them with a salary based income only.
However, FSU secretary Geoff Derrick says the change breaches Chifley’s own employment contracts with the planners in two places.
“One clause guarantees commission by stating there will be a scheme, with variations, but the removal of commissions goes far beyond that. The other clause states that any variation in the contract needs the approval of both parties,” Derrick says.
The FSU and the planners have offered to consider changes to the commission structure but only on the condition that the unilateral suspension of commissions is lifted and that the planners will not be worse off under any new agreements.
Furthermore, the union says it recognises that Chifley has chosen to reposition its pricing and marketing strategies.
However, in correspondence to the union, Westbrook maintains the changes in commission do not breach any contract conditions but are in fact contained within the provisions of the contract and the group would not withdraw the changes.
According to the FSU, the original letter outlining the changes to employment conditions states the board and senior management had reviewed the group’s investment structure and funds, and investment products offered by the group would be repriced.
The letter further stated that planners were paid with a commission system based on the service fee received through those investments and since the management fees would be reduced, so would the commissions flowing on from that fee. It also stated that the reduction would be such that there was no prospect of planners being able to fund their current or future salaries.
The reason for this change was said to be that the group’s business model, even before the purchase of Chifley, was not to pay commission and instead, planners would receive pay equal to their current base remuneration.
The planners claim that the commission-based part of their income was not high but was still a necessary part of their remuneration package since many of their clients are unable to pay fees and some work was conducted for no payment.
The FSU says of the six planners at Chifley, four will be disadvantaged by the move which is an attempt to bring the planners in line with pay conditions held by the planners who joined the group from FuturePlus.
FuturePlus is the planning arm of the Local Government Super Scheme (LGSS), which is a one-third owner of Chifley.
AUTHOR
Jason Spits
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