Hume lashes IFM Investors over $12.7m bonus

17 February 2020

The Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume, has taken a direct swipe at the practices of industry funds-backed asset consultant, IFM Investors, questioning a $12.7 million bonus paid to an unnamed director.

In doing so, Hume accused the Federal Opposition Labor party of double standards.

The Assistant Minister described IFM Investors as being “notoriously opaque” and claimed that the business had paid “a whopping $12.7 million bonus to an unnamed director, on top of their $2.8 million salary".

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“It’s concerning that the owners of IFM – 27 all profit for members super funds – a pouring their members’ money into an entity generating super-profits for executive, with alarmingly little transparency for members about where that money goes,” she said.

Hume said she could only wonder if a $12.7 million director’s payday was consistent with IFM’s ‘responsibility’ to put their fund members’ interests first.

“All profits for members, or fat profits for executives – what does Labor say?” she asked.

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Thank you Senator. Forget about what does Labor say - what does the law say! Fees for no service. And, if you're not happy, change the law.

Compare the pears. Just like the intra-fund advice arrangements, it looks like yet another example of hidden commissions to me.

ASIC's position......."nothing to see here"!

Poor consumer gets shafted again. When you create a monopoly, someone will rort it - how can a $12.7m payment be undisclosed?

As at 30th June, 2018, a very large and very well known Industry Super Fund released the following information in a document dated March 2019.
Under the heading "Related party investments and transactions"
At 30 June 2018 the fund had:
* A 31% shareholding of ordinary shares valued at $1,710,775 in Frontier Advisors Pty Ltd
Frontier receives fees from the fund for investment consulting services.These fees were $3,721,731
A Director and Chair of the Board of this very super fund (as nominee of fund) is a Director of Frontier Advisors Pty Ltd.
and received fees of $14,442.
Here you have a Director and Chair of the Board of a massive Industry Super Fund of which that very same fund owned shares in a 3rd part related entity that provided investment consulting services to that fund of which that Director was remunerated by both entities !!
If this is not a conflict of interest then what is ???
In addition under the heading " Other shareholding and transactions" it reads..
As at 30 June , 2018 the fund had :
* A 17.7% shareholding in Industry Super Holdings Pty Ltd (ISH) valued at $147,657,984 .
Industry Funds Management Pty Ltd (IFM) is a subsidiary of ISH and manages investments totalling $10,232,508,108 on behalf of the fund.
And here's the kicker........This very super funds Director and Chair of the Board's life partner is also a Director of Industry Super Australia Pty Ltd (ISA), and Chair of Industry Super Holdings Pty Ltd (ISH) and Industry Funds Management Pty Ltd (IFM).
This Director and Chair of the Board of Directors of the very large Industry Super Fund was in that position from 1994 and interestingly resigned from those positions on 31/12/2018.
Just have a think about this for a minute and try and justify how on earth there is not a conflict of interest where life partners are intimately connected and receiving remuneration from not only the fund itself but multiple linked entities which also provide services to that super fund and for which that super fund also owns shareholding in some of those related entities.
This is not fiction...this was happening.
The money machine of Industry Super Funds and the related entities that provide services to them is massive.
There are a number of individuals who have benefited greatly from these arrangements over the years....the wealth is simply staggering.
The irony of course is the marketing mantra that has been on repeat for years that we are only run for the benefit of the members....we pay no commissions or fees etc etc............
Behind the scenes there are individuals who are benefiting at staggering levels off the back of mandated Super Guarantee contributions and the loyalty of a massive donation program to the trade union movement.
It is time the Government stood up and had the courage to expose the practices that really go on and level the playing field once and for all.

confusing, but this IFM is owned by Industry Super Holdings Pty Ltd. Seems a way to funnel a bucket load of money away from the 27 industry funds to pay some massive executive bonuses....

Imagine if ASIC & APRA ever looked properly into Industry Funds.... we are still waiting for them . Staggering they haven't.

they just can't help themselves.. just a golden honey pot!

Where's Adele Ferguson?? This could be bigger than the RC.

One would have to ask Adele why she isn't interested..

Industry Super pays too much in advertising for this to see the light of day in mainstream media.

Absolutely. The only people who say the media is not for sale is a young journo.
And Industry Super profit for members, only after the wages, advertising, Tennis, Corporate boxes and bonuses have been paid. And potentially some research grant for Hedware?

Hello Hedware, where are you?

Hedware is a pseudo-intellectual that can't understand the factors and forces that drive the real world.

ASIC like working with industry funds, and IFM. See their release below. Personnaly I did not realise that "community outreach" was part of ASIC's role, and I have no idea now the Agangu people in SA would need outreach from QSuper, nor how this satisfies the member requirements of Qsuper members.

18-155MR ASIC leads super industry on outreach trip to the APY Lands
ASIC is on the road this week, leading a group of senior executives from the (Aust Super/HESTA/Super SA/ QSuper and Prime Super) to visit South Australia’s remote Anangu Pitjantjatjara Yankunytjatjara (APY) Lands.

An initiative of ASIC’s Indigenous Outreach Program (IOP), the group will be in the APY Lands from 28 May – 2 June, to both learn from and help local Indigenous consumers with their super.

Representatives from Australian Super, HESTA, Super SA, QSuper and Prime Super will work directly with community members and interpreters to connect Anangu – the Pitjantjatjara and Yankunytjatjara-speaking people - with their superannuation entitlements.

Are ASIC and Australian Super representatives flying Qantas by any chance ???

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