A Queensland financial planner has hit out against the advertising campaigns employed by industry superannuation funds as part of a submission to the joint committee inquiry into the financial services industry.
Certified financial planner Robert Ross said while industry superannuation funds have “a potential for good” in Australia’s superannuation system, he believes they should nonetheless be singled out for criticism for “using members’ money to fund a relentless campaign against [financial] advisers”.
“[Industry funds] seem to me to have no other motive than to cripple the advisory network … and as a result obtain the market share that advisers manage,” Ross said.
Ross said industry funds have been “at the forefront of an attack on advisers” in which they have spent “tens of millions of members’ money” on advertisements that seek to “influence customers, the media and the regulators that the culprit for the world’s financial crisis is the remuneration model of financial advisers”.
Ross said he believes that the industry funds find financial planners to be “formidable competitors, who they have not been able to defeat despite the supposedly better performance of the industry funds”.
“It seems to me they are now at the last throw of the dice trying to get rid of them by having [planners’] wages banned,” Ross’ submission stated.
Ross said while industry funds do not “pay advisers”, he pointed out that they do spend substantial amounts on television and newspaper advertisements to communicate this to existing and potential members.
“They also sponsor football teams. That too comes at a cost to existing members,” the submission stated. Ross takes issue with the fact that existing fund members are paying to attract new members, while a payment to an adviser is made after a new member invests.
Ross also argued that “although the industry funds see an issue with advisers being remunerated out of customers’ accounts they apparently see nothing wrong with themselves being remunerated out of such funds”.
“An adviser has staff too. Is the adviser expected to find the money for his staff from somewhere else?”
Ross said that as industry funds “see advisers as their main competitors, there is a perception that they need to achieve an outcome that will prevent a financial adviser being remunerated out of superannuation funds”.
“If they succeed they effectively stop advisers from being remunerated at all, and at a stroke remove their main competitor,” Ross’ submission stated.
Ross said he becomes “deeply offended” when certain industry stakeholders condemn other models, “as if only they care about a customer’s needs, as if only their way can achieve a customer’s goals and objectives, and who claim that those who take a different position are charlatans, parasites or crooks”.
