Intra-fund an opportunity, not a threat

Contrary to the concerns of many in the financial planning industry, the vast majority of phone-based intra-fund advice services offered by industry funds are manned by fully qualified financial planners.

Industry Super Network (ISN) manager of strategy Robbie Campo said while that might change in the future, “for the time being funds still view it as important to have fully qualified planners delivering that advice”.

“The concern of the industry was that you would have call centre operators providing personal advice — that’s not the case,” Campo said.

Instead, intra-fund advice is being delivered “almost exclusively” by fully qualified financial planners, including some Certified Financial Planners.

“I’m not aware of any funds that use less qualified people to deliver that advice,” Campo said.

Campo is undertaking comprehensive research into the way ISN’s members use the intra-fund advice relief issued by ASIC just over a year ago.

Far from being a one-size-fits-all solution, industry funds view intra-fund advice as one component in “a spectrum of advice”.

Campo said industry super funds are “very mindful” of the need to have effective filters in place to ensure “people with complex needs aren’t given intra-fund advice”. Industry funds recognise members requiring holistic financial advice must be identified and referred upwards, “even if it’s going to cost them more”.

Furthermore, the provision of intra-fund advice by either industry or retail funds should not be viewed as a threat to financial planners, Campo argued. Rather, early discussions around investment choices and additional contributions would ultimately lead to consumers having higher super balances and a better appreciation of the value of advice.

Campo said the provision of intra-fund advice would lead to greater numbers of Australians seeking full financial planning.

“It won’t be an immediate effect but if it achieves its objective, you’re going to have more people with more money, who have a greater sense of the value of advice, who will then be wanting for advice,” Campo said.

“There’s such an enormous opportunity for [advisers] if it works — which it will.”

An agreement on remuneration structures might also lead to more co-operation between industry super funds and dealer groups, Campo said.

And it’s not just industry funds embracing this new form of advice delivery.

“The reaction of the financial planning community at the time RG200 was released … they considered this was a free kick to industry funds. But I understand there’s a number of retail funds that are also building and rolling out large scale intra-fund advice offerings,” Campo said.

“It’s not just a matter of cutting down some of the steps involved in full financial planning,” Campo said.

“It’s about building and delivering sustainable models for advice delivery.”