A quote in the media by an AMP Financial Planning (AMPFP) official that industry funds are “opaque” threatens to reignite a war of words between Industry Funds Services (IFS) and the dealer group over its decision to drop industry funds from its recommended products list.
The alleged quote in The Australian Financial Review on June 19 has prompted IFS executive chair Garry Weaven to hit back at AMPFP in an IFS media release.
“It is totally outrageous for AMPFP to describe industry superannuation funds as opaque simply because they invest in unlisted assets,” Weaven said.
“Access to private equity and infrastructure deals is one of the features of industry super funds which results in superior performance. Other features are low fees and no sales commissions.”
Calling on AMPFP to “state the simple truth”, Weaven claimed AMPFP does not want its “tied or influenced financial planners to recommend the best super funds. It wants them to recommend AMPFP funds.”
He also called for a fully independent audit, in the interests of “transparency”, of the net benefit to members in major master trust products recommended by planners and major industry super funds over five, 10 and 20 years.
Weaven’s comments follow an earlier rejection of AMPFP’s suggested reason for scratching its industry funds earlier this month as a result of “low client demand”.
While acknowledging he was “disappointed, though not surprised” by AMPFP’s decision, Weaven then suggested AMPFP’s decision was motivated instead by a “lack of commission”.
“Industry funds do not pay commissions, so why would AMPFP financial planners ever recommend an industry fund?” he said.
