The departure of David Whiteley as chief executive of Industry Super Australia (ISA) signals the end to a significant 11-year period during which the industry funds movement successfully injected hard, trades hall-style politics into the financial services debate.
While many financial planners will not be lamenting Whiteley’s move from being head of ISA to his new role within IFM Investors, it is worth noting the high regard in which he was held within both the trade unions and the industry funds movement.
It is also worth noting that during Whiteley’s 11-year tenure, the financial planning industry faced radical change, primarily via the Future of Financial Advice (FoFA) changes, then via the Life Insurance Framework (LIF) and more recently via the Financial Advisers Standards and Ethics Authority (FASEA) regime.
While the FoFA changes can be directly attributed to Whiteley and the multi-million dollar “compare the pair” advertising campaign paid for by the industry funds, the LIF and FASEA regimes can also be seen to have flowed from the relentless pressure maintained by Whiteley and ISA.
Not unrelated to the efforts of Whiteley and ISA was the Government’s decision to finally agree to the holding of a Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
But to fully appreciate Whiteley’s success, it is necessary to understand how ISA was established and the environment in which it was allowed to operate.
ISA had its birth in 2006 as the Industry Super Network (ISN) out of the Garry Weaven-inspired Industry Fund Services Group, with the English-born Whiteley being appointed as its first chief executive following a period with the Australian Council of Trade Unions (ACTU).
After campaigning successfully for an end to commissions paid to financial advisers via the Future of Financial Advice changes, the Industry Super Network evolved to become ISA in 2012 – something which saw it become separately corporately registered and no longer an offshoot of Industry Fund Services but, rather, a wholly-owned subsidiary of Industry Super Holdings, which is owned by 30 industry superannuation funds.
Industry Super Holdings is also the umbrella company for ME Bank.
Interestingly, the change in status came just days after the Federal Election which saw the election of the Coalition Government under former Prime Minister, Tony Abbott.
These days, ISA describes itself as being a body which “manages collective projects on behalf of Industry Super Funds with the objective of maximising the retirement savings of five million industry super members”.
“These projects include research, policy development, government relations and advocacy as well as the well-known Industry Super Funds Joint Marketing Campaign,” the organisation’s web site states.
ISA also employs close to 30 staff members and handles the expenditure of millions of dollars a year on behalf of its member funds undertaking exercises such as the “compare the pair” advertising campaign, “the fox in the hen house” campaign as well as research projects undertaken by a range of firms as diverse as SuperRatings, Rainmaker and Rice Warner.
Importantly, the use of the ISA framework means that the individual funds paying for the advertising and research do not have to specifically itemise that expenditure in their annual reports.
It is indicative of the power behind ISA that its chairman is former NSW Liberal leader, Peter Collins, with the deputy chair being former Labor Federal Minister and ACTU president Greg Combet, alongside directors such as former Victorian Labor Premier, Steve Bracks, current ACTU secretary, Sally McManus, Australian Super chief executive, Ian Silk, Garry Weaven and the chief executives and directors of the major industry funds.
When the Government called the Royal Commission it was careful to ensure that superannuation was included in its terms of reference and, in doing so, it has probably ensured that representatives of ISA will be asked to explain the organisation’s role and the activities it has undertaken.
Will Whiteley’s departure from ISA mean he will not be asked to appear? Not necessarily, it is entirely within the powers of the Royal Commission to require Whiteley’s appearance.
In the meantime, love him or hate him, it is hard to argue that Whiteley did not achieve the objectives he was handed by his industry funds constituents.