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1. not-here-to-be-popular | 22 December, 2009 at 06:51 PM
   Greg, I think the bolony you have bought into that Timbercorp/GSP et al used to spin about amortising out the 10% commission over the life of the ‘investment’ argument has been lost. Um...Liquidators anyone? They were misleading, ponzi products which couldn’t sell without the 10% (minimum) comm. Agree ongoing trails on mortgages are just as bad, but real estate agents comm is transactional....nevertheless, why shouldn't those guys be able to give advice without getting caught in regulatory net that we do? And incidentally, I don’t, and never have worked for an industry/public sector fund. Headache – I think the $ spent by industry funds is about the current rush to gain market share. And that’s OK I guess. It’s a free market out there. It’s in their members interest to be bigger and obtain economies of scale. Their returns are consistently better than retail funds anyhow. Granted this opens up the argument about large holdings of unlisted (and hence infrequently valued) assets. You have to admit though, that by and large, they provide a pretty good service for the cost for the average punter at which they are aimed....So....Your point that ‘the money could be better spent’ is somewhat valid. I could also argue that the fees I pay on my retail fund could be better spent than sponsoring their tied dealer group’s hedonistic, glamorous, subsidised conference with entertainment which would rival cirqe de sole I attended....
2. Brett | 21 December, 2009 at 09:58 AM
   People who continually post on here regarding advisers ripping people off by charging fees/commissions on SG accounts need to go get a lesson in financial planning themselves. If you're a 30 year old person (or any age really) who has the choice of paying for financial advice out of your own cash flow or out of your super fund's account balance, which one would you choose? Smart move I would say, use funds that are not normally available to you until your 55 at the earliest, to look at debt reduction or accumulation strategies.
3. Greg | 18 December, 2009 at 01:26 PM
   ....and if clients don't feel like they receive any service or value, of course they should be empowered to turn of the trail.
4. Greg | 18 December, 2009 at 12:12 PM
   Not here to be popular & Jeremy-you are both making generalisations based upon your experiences. I trust these are experiences as NTBP says. Clipping peoples sg(who does this? We don't), upfronts on Agribusiness-well that is 10% over 14 years of a project that is upfront only-that an adviser is legally responsible for with no ongoing commission/payments. That is .7% over the life of the project-hardly exhorbitant. As you still haev to service this customer each year for 14 years without further payment. Anyway, re:FEA-they have changed this structure to make everybody happy since it is too hard to understand the above logic. Having dealt in Customer Complaints for a multi national, there is not a lot of credibility to what you or Jeremy say. For advisers who take a default and do nothing-throw the book at them-go on ASIC-do your job! Storm had complaints from clients to ASIC-which were not acted on for 1 year before they fell over. The owner allegedly failed and owed $20million 5 years ago-from another 'advice' operation. He should have been banned for life! For advisers who disclose this default and provide advice there is nothing wrong with this. So you both are syaing there is nothing wrong with churn of home/business loans where brokers receive significant upfronts/trails or Real Estate people who charge 4% on a $1million sale, but shock, horror-how dare a adviser receive a dafault commission?! What?! If the client receives 'service', and it is disclosed there is nothing wrong with that. Clients who are serviced, their adviser needs to receive some income (we are not a 90% market share industry fund with economies of scale) to pay for PI cover, phone calls, meetings, operating expenses, newsletters etc If you think clients are going to pay for this directly-rubbish. It is also interesting to note the advisers banned in the last 2 days on this website. You can hardly categorise them in the same brand as professional advisers. With educational standards, yes this also needs to be upgraded. It is too easy at the moment for somebody to get accredited and then call themselves an adviser-that is wrong. They also need the industry experience-and under a good advisers mentoring, this takes years.
5. Marj | 18 December, 2009 at 11:00 AM
   Not here to be popular I have Care as my work default fund returns ho hum service and advice is non existant even when I phone and write guess your sacastic email means you are working for an industry scheme (I believe originally union scheme)
6. Headache | 18 December, 2009 at 08:41 AM
   Popular - Companies like ING with Billy Connelly, advertise to gain more members/clients. My concern with Industry funds who 'run only to profit members' is that they spend millions of dollars on advertising collected from client fees to gain new members for their funds. How does this advertising help its existing members? To me the money could be put to better use.
7. not-here-to-be-popular | 17 December, 2009 at 11:12 PM
   Oh please. Lets open this up. I, like us all have worked in this game for a long time in lots of roles - Public/private/advice/sales. Firstly, it’s far too convenient for advisers crying poor over industry funds and their ‘smokes and mirrors’ approach to advertising. No different to the annual millions spent by insto's on same (Billy Connelly, anyone?). Here’s the truth. You have been on the gravy train for far too long. Obscene remuneration practices (clipping a % of people’s SG conts, nil entry fee products, Agribusiness)....and money for jam generally. You are all a little upset & precious that your fabulous party is coming to the wee hours of the morning, and could well be over soon. Don’t get me wrong. The value of good advice is priceless, and there are many thousands of outstanding practitioners out there. But please, enough with the clutching of any straw that threatens your closed shop. You have had one of the most enormously relatively unregulated opportunities to make lots of money doing relatively little for a LONG time. I know. I’ve entertained/worked with/for you for years. 100’s of you have told me in intricate detail. You are collectively not considered professionals by the community as you would like for good reason. No fiduciary duty. AR obtainable within 3 weeks, 80% of you are slaves to your institutional masters, channelling money into their products (how often do you recommend industry funds?). Try to get 3-4x revenue for selling a law firm medical practice. BOLR. Dealer overrides. Shelf space fees. Volume rebates. Glamorous, o/s conferences. VERY few people quite legitimately have zero time for your tales of woe. Boo Hoo. All have a role to play including Fund Mangers, Platforms & regulators but you and your lobby groups need to concentrate on advocating for the structural change the whole industry needs and things might be different.
8. Headache | 17 December, 2009 at 07:30 PM
   JS - I wonder how spending millions of dollars on advertising benefits the members of industry funds.
9. Matt | 17 December, 2009 at 05:41 PM
   Interesting article for your viewing: Industry funds are number one for advertising It is official Industry Super Funds is spending more money on television advertising than any other advertiser. Top 10 spots on Sydney free to air TV. 1. Industry Super Funds 2. O'Brien 3. KFC 4. Hungry Jack's 5. Advanced Medical Institute (AMI) 6. Foxtel 7. Harvey Norman 8. McCain 9. Smoking Quitline 10. Optus Bundles - Fusion (All data provided by AirCheck Broadcast Monitoring. AirCheck.net.au Week ending March 23 2009. Source: ww.mediaweek.com.au) It would cost an incredible amount of money to sustain this air time; money that perhaps could be better used to invest for members while prices are low? Instead, the focus appears to be trying to maintain market share in the face of delivering negative returns. In the new Bernie advertisements, Industry Funds no longer run the line “run only to profit members”. Why is that? We don't know the answer to that but suspect that they've realised profits to members also mean losses to members given the current market performance. Instead the tag line now says “run only to benefit members”. This is perhaps as equally misleading as “profits to members”. A great number of firms and individuals benefit from industry funds. Administrators – Superpartners and Australian Administration Services run nearly all of the major industry superfund back offices Custodians Investment advisers Fund managers Insurers Suppliers Lawyers Directors Staff And of course TV stations who benefit from all that advertising. If the advertising were true, surely all these businesses would be run only to benefit members too. It’s also important to note that Bernie is still telling people to look for the logo on their statement. As we've said before, a logo is a poor substitute for good advice.
10. Jeremy Smith | 17 December, 2009 at 05:09 PM
    Jim – several industry funds offer daily unit pricing. Yet another retail operator who has zero knowledge of the industry fund world. As for the rest of the stuff you wrote – doesn’t really warrant a response.
11. Jeremy Smith | 17 December, 2009 at 05:00 PM
    Meant AFA not ISFA
12. Jeremy Smith | 17 December, 2009 at 04:13 PM
    In answer – the same way the AXA’s, AMP’s banks and any other financial planning organisation funds their advertising. I wasn’t aware that ISN was attacking retail advertising and research – perhaps ISFA could indicate where exactly ISN has stated that. Advertising and research is an important way to communicate and improve a fund – retail or industry I see nothing wrong with that. Do you headache? Commissions on the other hand contribute nothing to the industry other than bleed funds out of a member’s account and are absolutely a drag on the system.
13. Greg | 17 December, 2009 at 03:57 PM
    Finally, somebody from a retail body is doing some work and sticking up for our end of the industry! What ahout the other retail industry bodies-FPA maybe-aren't they 'supposed' to represent financial planners............!?
14. Jim Wilkinson | 17 December, 2009 at 12:49 PM
    Full marks to the AFA for setting the record straight and rebutting the malicious harping of the Industry Fund 'bully boys'. It's a shame the FPA cannot get its act together here. Maybe it's time the FPA got out of the way and merged with the AFA. Industry Fund spruikers are nothing more than unionised thugs who have a long history of spending their members' funds on wasteful prime time advertising. Industry Funds fail to provide daily unit pricing. This penalises many members financially. They fail to provide adequate insurance and proper advice. Their investment options lack transparency. Has anyone ever tried to set up a TTR or Recontribution strategy through an Industry Fund or challenge an error in the treatment of tax on contributions? Best of Luck! Contrary to their advertising slogan, all they seem to really offer is a 'Lifetime of Indifference' How they could ever fulfil the role of a fiduciary by acting in the best interests of their members is beyond me.
15. Simon | 17 December, 2009 at 12:15 PM
    Well done Richard...asking the pertinent questions. Finally, someone with the kahunas to stand up to the constant propaganda the industry funds are delivering to the public.
16. Headache | 17 December, 2009 at 11:12 AM
    JS - Before you go on your usual tirade regarding commission, can you please provide an opinion or answer to Mr Taggarts question: “The even bigger question is how are their multi-million dollar advertising campaigns and their extensive industry research being funded?”