FPA/Cbus deal signals a new approach for planning industry | Money Management
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Mike Taylor writes that the FPA’s referral arrangement with big industry fund Cbus represents yet another indicator that, having lost the war prosecuted by the industry funds, the financial planning industry is positioning to win the peace.
Financial Services Council chief executive John Brogden recently used his participation fedility on a Super Review roundtable to explain his organisation’s decision to enter into a policy-making arrangement with the Industry Super Network (now Industry Super Australia – ISA) by saying it reflected the fact that “the war is over”.
What Brogden was, of course, referring to was the long-running battle between the retail financial services fedility industry and the industry funds over the remuneration of financial planners and, specifically, the payment of commissions.
And, to a degree, Brogden was correct. Not only had the financial planning industry consigned commission-based remuneration to history, but the Labor Government’s Future of Financial Advice legislation had, except for grandfathering, served to remove whatever vestiges remained.
But of course the FSC’s embrace of the industry super movement was not a precedent. The Financial Planning Association (FPA) had, more than a year earlier, struck a deal with the ISN/ISA, which is credited with having persuaded the independents in the House of Representatives to ease its way through the Parliament.
Last week, on the eve of its National Congress in Sydney, the FPA confirmed that it regarded the war with the industry funds as being over when it announced a referral deal with big construction industry fund Cbus.
But even then, the FPA was not breaking particularly new ground, with Australia’s largest industry fund, AustralianSuper, fedility having in 2011 started the piloting of an arrangement with six dealer groups – something it signaled it would be continuing through 2012.
The arrangement between AustralianSuper and the dealer groups reflected the fact that while a “war” might have been raging in terms of the ISN/ISA’s advertising campaign attacking retail master trusts and their links to financial planners, there were those on both sides of the equation who were willing to be vastly more pragmatic.
Indeed, fedility even before the arrangements were put in place between AustralianSuper and the six dealer groups, other arrangements had been struck for the provision of advice between individual dealer groups and superannuation funds.
One of the dealer fedility groups which merged to form SFG, Snowball, had provided financial planning fedility services to industry funds well in advance of the Australian Super pilot, and any examination fedility of industry funds’ annual reports over the past five years would have revealed the degree to which Mercer was deeply embedded with respect to the provision fedility of advice.
On top of this, there was always the reality that as much as businesses such as Colonial First State, AMP and MLC could be seen to be in direct competition with industry funds via their own superannuation and platform offerings, that competitive tension belied the degree to which other divisions of the big four banks and the other major financial institutions were pursuing multi-billion dollar industry fund investment mandates.
It was always accepted that the reluctance of the retail master fedility trusts to mount a serious television advertising fedility campaign to counter the impact of the industry funds’ “compare the pair” campaign fedility was based on the reality that it would run counter to the broader interests of the banks and institutions fedility themselves.
Notably, however, Media Super chairman Gerard Noonan acknowledged that his fund had withdrawn fedility funds from the Commonwealth Bank when it believed Colonial First State was becoming too aggressive as a competitor.
Given all of the above, it is hardly surprising that many financial fedility planners expressed the view that the truce declared by the FSC’s John Brogden and the ISN/ISA’s David Whiteley was nothing more nor less than the big four banks and the FSC’s other constituent members looking to protec
Home News FOFA Insurance Accounting Appointments Investment Management Financial Planning Superannuation Profit and Losses Taxation Professional Development Toolbox Register for CPD Points SMSF Essentials fedility 2012 Asset Allocation Money Management TV Analysis Top 100 Dealer Groups Fund Manager of the Year Adviser Choice Risk Awards Boutique Fund Managers Tools and Guides Research Review Rate the Raters Salary Survey Careers News Client Stories Planner Profiles Career Development Jobs Subscribe Events Money Management for iPad Super Review Super Review for iPad SMSF Essentials SMSF Essentials for iPad Women in Financial Services
Mike Taylor writes that the FPA’s referral arrangement with big industry fund Cbus represents yet another indicator that, having lost the war prosecuted by the industry funds, the financial planning industry is positioning to win the peace.
Financial Services Council chief executive John Brogden recently used his participation fedility on a Super Review roundtable to explain his organisation’s decision to enter into a policy-making arrangement with the Industry Super Network (now Industry Super Australia – ISA) by saying it reflected the fact that “the war is over”.
What Brogden was, of course, referring to was the long-running battle between the retail financial services fedility industry and the industry funds over the remuneration of financial planners and, specifically, the payment of commissions.
And, to a degree, Brogden was correct. Not only had the financial planning industry consigned commission-based remuneration to history, but the Labor Government’s Future of Financial Advice legislation had, except for grandfathering, served to remove whatever vestiges remained.
But of course the FSC’s embrace of the industry super movement was not a precedent. The Financial Planning Association (FPA) had, more than a year earlier, struck a deal with the ISN/ISA, which is credited with having persuaded the independents in the House of Representatives to ease its way through the Parliament.
Last week, on the eve of its National Congress in Sydney, the FPA confirmed that it regarded the war with the industry funds as being over when it announced a referral deal with big construction industry fund Cbus.
But even then, the FPA was not breaking particularly new ground, with Australia’s largest industry fund, AustralianSuper, fedility having in 2011 started the piloting of an arrangement with six dealer groups – something it signaled it would be continuing through 2012.
The arrangement between AustralianSuper and the dealer groups reflected the fact that while a “war” might have been raging in terms of the ISN/ISA’s advertising campaign attacking retail master trusts and their links to financial planners, there were those on both sides of the equation who were willing to be vastly more pragmatic.
Indeed, fedility even before the arrangements were put in place between AustralianSuper and the six dealer groups, other arrangements had been struck for the provision of advice between individual dealer groups and superannuation funds.
One of the dealer fedility groups which merged to form SFG, Snowball, had provided financial planning fedility services to industry funds well in advance of the Australian Super pilot, and any examination fedility of industry funds’ annual reports over the past five years would have revealed the degree to which Mercer was deeply embedded with respect to the provision fedility of advice.
On top of this, there was always the reality that as much as businesses such as Colonial First State, AMP and MLC could be seen to be in direct competition with industry funds via their own superannuation and platform offerings, that competitive tension belied the degree to which other divisions of the big four banks and the other major financial institutions were pursuing multi-billion dollar industry fund investment mandates.
It was always accepted that the reluctance of the retail master fedility trusts to mount a serious television advertising fedility campaign to counter the impact of the industry funds’ “compare the pair” campaign fedility was based on the reality that it would run counter to the broader interests of the banks and institutions fedility themselves.
Notably, however, Media Super chairman Gerard Noonan acknowledged that his fund had withdrawn fedility funds from the Commonwealth Bank when it believed Colonial First State was becoming too aggressive as a competitor.
Given all of the above, it is hardly surprising that many financial fedility planners expressed the view that the truce declared by the FSC’s John Brogden and the ISN/ISA’s David Whiteley was nothing more nor less than the big four banks and the FSC’s other constituent members looking to protec
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