The Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten (pictured), has told financial planners that there is no need to compete with the intra-fund advice services offered by industry superannuation funds, as they cannot sabotage planners’ businesses.
“If you decide to continue to worry about the industry funds killing your business, while you do that I think you’ll miss out on a number of opportunities,” Shorten said.
Shorten’s comments followed a number of questions raised by planners about the industry super fund advice cross-subsidisation during the question and answer session at the Financial Planning Association’s (FPA’s) luncheon with the minister.
“How do we compete with industry funds, who cross-subsidise advice to members, when they quote figures of $200 or $300 for a transition-to-retirement strategy, which is then effectively paid for by the entire membership?” an FPA member asked.
Shorten responded by telling planners that intra-fund advice could not compete with the depth of strategies provided by financial planners.
“We did some research about the level of intra-fund advice that gets cross-subsidised. I don’t know how many of you have been to a retirement planning seminar by industry funds, but it’s pretty general advice and I don’t think it’s the advice of such depth that you provide to individuals,” he said.
“I get the point about advice in general and cross-subsidisation. Our view is that having the MySuper licence will make it a lot harder for everyone to provide cross-subsidies in the price they present to people.”
The industry super fund sector will not go without a challenge, either, according to Shorten, who reminded the audience that MySuper will also be available to the retail sector, which would create more competition.
During the question and answer session at the luncheon, some financial planners had also raised concerns about the Government’s consultation process with planners or lack there of.
Fiducian managing director, Indy Singh, pointed out to the minister that no financial planners were represented on the Treasury’s superannuation panel and accused Shorten of not consulting with financial planners.
“I’m sorry I haven’t consulted you directly, but I’ve spent a lot of time talking to a lot of planners, and if the FPA are prepared to take you to a meeting you are welcome to come,” he said.
“And I do talk to financial planners and I am standing in your corner for the promotion of your profession. But if that therefore means the only way I can make a profession by simply agreeing with everything that everyone tells me then I’m going to disappoint you.”
