Sealcorp takes a swipe at industry fees
Sealcorp chief executive Ian Knox has called for a comprehensive review of “soft dollar revenues” across the financial services industry.
While the institutional funds management market has already set standards in the disclosure of soft dollar deals, or deals between fund managers and platform providers, Knox says it is now time for platform and trust operators to do the same.
“The platform industry is being pigeon holed into controlling distribution. The true destiny of the industry is to effectively have an array of providers, not just offer a single offering with deal-making behind the scenes,” he says.
Knox says the recent launch ofColonial’s FirstChoicemaster trust, which has the highest commission structure in the industry, according to Knox, is of real concern to both the consumer and the direction of the industry going forward.
“That is not progress for consumers,” he says. “We should be passing through all scale benefits to the consumer.”
Knox says the industry has now blurred the issues of fee disclosure and fee reduction, making it difficult for the consumers to understand who takes what in the value chain, and he says unless the industry takes some action, the regulators will be encouraged to step in.
Knox saysAsgardis the only group in Australia which presently re-distributes economies of scale to consumers, actually passing on additional discounts struck with fund managers to Asgard investors.
They do this by negotiating a fee with fund manager based on the amount of money invested with them. This is then rebated to Asgard who calculates this as a dollar value which appears on the client’s statement.
“It is money in [the investor’s] account,” Knox says
Knox says with the Superannuation Guarantee recently increasing to 9 per cent per annum, people are being obligated to invest money, with much of it ending up in trust. He says with the current state of fee disclosure, the margins on some of these products is reprehensible.
Recommended for you
Inefficient data processes and systems mean advisers are spending over half of their time on product implementation and administration at the expense of clients, according to research.
With the regulator announcing its enforcement focus for 2025 last week, law firm Hall & Wilcox examines the areas which have dropped down the list in priority for the regulator.
South Australian financial advice and accounting business Perks has extended its paid parental leave program from 12 to 26 weeks, putting it on par with big four firms.
Mason Stevens has tapped Investment Trends’ head of growth, alongside two other hires, to bolster its distribution team.
