Industry Super Network attacks FPA's commission stance
Industry Super Network's spokesman David Whiteley has criticised the Financial Planning Association's position on commissions associated with the sale of life insurance.
As former 1960s UK callgirl Mandy Rice-Davies said: “Well he would say that, wouldn’t he?”
Such is the track record of Industry Super Network (ISN) spokesman David Whiteley that no one should be in the least bit surprised that he last week chose to attack the Financial Planning Association (FPA) over its support for commissions continuing to be paid with respect to insurance products.
Assuming Whiteley’s statement was not merely a Pavlovian response to the word ‘commission’, the ISN spokesman has clearly failed to understand the difference between commissions relating to the provision of financial advice and commissions relating to the sale of a product — insurance.
As well, Whiteley clearly fails to understand the limited nature of the insurance products offered via most superannuation funds, notwithstanding the fact that their suite of offerings has been gradually improving beyond the tradition of life insurance to include income protection and total and permanent disablement.
However, the reality remains that with the rare exception of funds such as REST, members have only limited ability to vary their coverage beyond a fixed template of offerings.
What is more, Whiteley’s comments fail to take account of the distinct differences between the group and personal insurance markets and the manner in which Australia’s underinsurance problem has continued largely unabated.
While it is true that advisers are paid a commission on the sale of insurance products, it is also true that they cannot hope to compete with superannuation funds on the basis of cost. It follows that advisers are mostly receiving commissions on the sale of insurance products not offered by funds.
Ironically, the companies paying commissions to planners on the sale of insurance products are those competing strongly on the group insurance mandates offered by industry superannuation funds — a mandate market so competitive that it can make a real difference to the decision-making of employers with respect to the selection of default funds.
AUTHOR
Mike Taylor
Recommended for you
In this week’s episode of Relative Return Insider, hosts Maja Garaca Djurdjevic and Keith Ford take a final look at the lay of the land ahead of the federal election as the latest polls predict a Labor victory, and what that could mean for Australians going forward.
In this week’s special edition of Relative Return Insider, we bring you outgoing Financial Services Minister Stephen Jones’ keynote from Momentum Media’s Election 2025 event, followed by a Q&A focused on the Delivering Better Financial Outcomes reforms.
In this week’s episode of Relative Return Unplugged, Dr Vladimir Tyazhelnikov from the University of Sydney’s School of Economics joins the show to break down the shifting sands of global trade dynamics and attempt to understand the way US President Donald Trump is employing tariffs.
In this week’s special episode of Relative Return Unplugged, we present shadow treasurer Angus Taylor’s address at Momentum Media’s Election 2025 event, followed by a Q&A covering the Coalition’s plans for the financial services sector.
