Advisers question QSuper’s new advice model

6 July 2020

A number of financial advisers have questioned why the Australian Securities and Investments Commission (ASIC) should not take a close look at the manner in which Queensland superannuation fund QSuper has been providing financial advice.

The questioning comes in the wake of the superannuation fund confirming to Money Management that it would cease offering comprehensive advice to new clients following a review that found that demand for comprehensive advice was decreasing.

The financial planners are questioning whether QSuper is simply shifting to a lower cost intra-fund advice model, something should warrant scrutiny by the regulator.

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On Friday, a QSuper spokesman acknowledged job losses flowing from the decision, with 23 paraplanning related roles being made redundant from the end of August and 32 other support roles being affected by October.

The spokesperson said existing comprehensive advice clients would be able to continue using the service for the remainder of their current agreement and would be provided assistance to ensure their advice needs were met in the future.

QSuper chief executive, Michael Pennisi said a review undertaken by the fund had seen it significant expand “the personal, over the phone financial advice service available to members which is provided at no additional cost to the member”.

“The expanded service provides advice on topics including establishing an account-based pension; commencing a Transition to Retirement strategy; and advice related to retirement income projections.

“Since we expanded our over the phone personal financial advice service, we have seen a 35% increase in demand for the service. This change has made personal financial advice more affordable and accessible for our members in the current environment.”

Pennisi noted that the fund had increased the number of advisers available for over the phone personal advice appointments and had expanded topics related to its super products members could discuss.




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If there are plenty of sucker fund members out there being charged to pay for my free advice (without providing informed consent, nor opting in to the fund each year), why pay for it? lol What a scam.

Interesting. The husband of a client who recently retired went to QSuper to seek financial planning advice prior to coming to see us. Firstly, he was told that they were happy to help him move the monies from a Defined Benefit Fund into their Allocated Pension. When he asked if they would also give him advice on implementing a recontribution strategy he was told no they would just advise him of the steps and that he had to arrange that himself. Hence, he walked into our office and said I feel a lot more comfortable joining my wife as a client of yours.
I wonder what would happen to an adviser not linked to an industry fund who behaved in this manner. I also wonder if there will ever be a level playing field regardless of whether you believe Industry Funds, SMSF’s or Full Service Platforms provide the best solution for Administering money.

and THAT is the scam known as IntraFund "advice". And the FPA has about 1000 paid up members, who think the intrafund advice scam is just hunky dory. Meanwhile, the FPA is selling the real advisers up the river.

Completely agree Steve. Those wanting Financial Planning to be a "Profession" which seems to include the FPA (at least when it was selling CFP) seem to forget that these employee "Intra Fund" and paid up employees will be alive and well and providing advice that recommends their in house product each and every time.
I believe it is product sales same as AMP had in the very beginning (1980s) - it's good at retaining members, it good at getting more money into the fund and that is about it.

I should have said when he asked if QSuper if they would also give him advice on implementing a re-contribution strategy he was told no they would just advise him of the steps 'verbally' and that he would have to arrange that himself.

It's an absolute joke and it's killing the advice industry. Even the Barefoot Investor recommends that retirees receive their retirement planning advice from super funds because it's low cost (and free in many cases). Forget about the inherent conflicts. What if it's better for the client to transfer their money into an annuity to increase their age pension outcome? Or pay down debt, etc. The point of FOFA was to remove conflicted remuneration...this only reinforces conflicted advice and remuneration. What an absolute joke. If the government is serious about removing conflicted advice and ensuring advisers act in the clients best interest then:
1. Only registered advisers who are NOT employed by super funds should be able to give financial advice to super members.
2. All registered advisers can deduct their advice fee from ANY super fund (as long as the client agrees).

This will ensure that the client receive advice that is in their best interest (without conflict) and will ensure that money flows to the better funds over time, thus making all super funds more competitive.

Yes it's unfair, but these areas will be source of new members for the FPA. Because of that relationship and the lack of representation my advice is to get used to the un-level playing field. Screaming out to ASIC won't help either given industry bodies won't be saying anything to them. So, if your advice model is competing with someone in a call centre you're in loads of trouble.

Well ASIC, FPA, AFA, and FASEA now know about this. Lets see how long it takes them to do something about this Reportable Beach regarding what QSupers offers as Intrafund Advice.

Roger, i've seen your post across a few articles... you keep saying it's a reportable breach. Articulate exactly how it's a reportable breach... and saying it's a "fee for no service" issue isn't the right answer. Before you answer, maybe take some time to brush up on your understanding of s912A.

James, can you tell all of us how this type of intra fund advice meets all the requirements of the new code of ethics point by point? Id be really interested in how you explain away standard 3, 4 and 7.

If you need this to be explained to you, you have serious issues!

It's very simple. Cross-subsidised Intrafund advice commissions & bonuses to inhouse vertically integrated sales staff fails the informed consent requirement to fund members, as identified by the Haynes Royal Commission & FASEA Code of Ethics. Millions of fund members are paying for the advice of other people (that they are not receiving), and have NOT given informed consent for those advice fees to be charged against their funds. A lot of advisers have finally woken up to this massive insto/union super scam against retail advisers, & the FPA are not serious about fixing it, as they have 1000 advisers who are on the intrafund salary & bonus structure. ie the FPA has a conflict of interest on this issue. If the instos wish to retain Intrafund, then "Opt In" of SoA disclosed ongoing fees for retail advisers must be changed via legislation back to "Opt Out". Otherwise, intrafund must be shut down. It's all in, or its all out. Retail advisers will not be silenced on this grievous industrial relations issue.

Steve, Looks like you've made some assumptions as to bonuses and commissions? Intra-Fund planners are not product sales staff, they are giving advice on already owned products - The legislation clearly states that an Intra-Fund planner is not able to recommend someone acquire a product if they are not already a member of that super fund.
There's so much anger directed at Intra-Fund advice.... IntraFund has its place, just as does comprehensive advice... I've been in the FP industry for many years, and I'm not one bit concerned as to what IntraFund is, or isn't doing, as my clients value my services. if they decide to take up an IntraFund offering, and that satisfies their needs... so be it. It'll allow me to focus on serving the clients that are willing to pay for my value.

Intrafund advice works the same way commissions worked for advisers giving advice on a product they were already a member of only difference is customers can't have face to face service anymore

Sounds like you have no idea about how Intrafund works, or you are collecting an Intrafund salary. If intrafund advisers are being paid salaries & bonuses to retain the existing members within the compulsory default super fund they were forced to join, then yes, the "intrafund adviser" is definitely a product salesperson. I have no issue with Intrafund, providing it is invoiced on a per service basis to the supplier. The issue is very simple. There are now 1000 (FPA) advisers collecting handsome salaries & bonuses, without having to chase opt in notifications & churn out unnecessary Fee Disclosure Statements that retail personal advisers are required to waste their time on. Obviously you aren't doing either of those things, or you are grossly over charging to do them.

Jame what advice practice do you work in where you aren't one bit concerned about the ever increasing broadening of intrafund advice and losing clients to this?
For someone that has been in the industry for many years and 'supposedly' has clients willing to pay for your services, your comments throughout this article sound entirely conflicted, pro intrafund advice even?

James, just because something meets Legislation dosen't mean it's right, the right thing for clients, or even fair. Intra Fund advice is a carve out created in a dirty back room deal between the then Labour Government and Union run Super funds. This is an issue about fairness and a level playing field, and fixing an inequity. For call centre product floggers like James you'll be forever treated like a used car salesman, regardless of whether that's ridiculous, or not because of your peers view of that inequity. James, if you're an AR, on ASIC's FAR, you need to read up on FASEA because you are wrong on that point, unless of course you're not an AR in which case you'd be flogging a product and I'm wrong.

Hey Yogi, after you’ve collected a few more picnic baskets... find yourself a nice spot to continue your little “it’s unfair” whinge... as that’ll help you greatly in your pursuit of being a better planner!!

Or we educate consumers about the concept of how Intrafund Advice is a pure breach Informed Consent, and a larger group of advisers will actively lobby the MPs to put this insto market manipulation of scam of intrafund "fees for no service" to death. It is inevitable.

The alternative is to eliminate ongoing fee opt-ins. You just can't have no opt ins on intrafund, but opt ins for retail advisers at the same time. This is an industrial equity issue.

Straight from the QSuper website:
QSuper phone advice:
" Make the most of your super with PROFESSIONAL guidance available OVER THE PHONE"
QSuper account advice
Review investment strategy
Grow your super
Maximise super contributions
Access your super
Choose your insurance

QSuper retirement advice:
Plan and fund your QSuper retirement
Transition to retirement
Manage your retirement income
Retirement review

Cost: No additional cost for QSuper members.

Comprehensive advice:
A financial adviser can help you make confident decisions to help you:
Plan for a better retirement
Invest to grow your wealth
Minimise your tax
Reduce debt the smart way
Protect your income and family
Plan your estate.

We can work with your preferred financial adviser.Use our authority form to give them authority to speak with us about your account.
For help finding an adviser, visit the FPA !!!!!!

Note how the description of advice provided for the phone advice is much more specific in regard to advice areas whereas the list associated with a financial adviser is more general in nature and not specific to the member's QSuper account.
Secondly, QSuper will not approve or allow advice fees to be paid from the member's account to a third party adviser who holds an authority.
This is the clearest example of how the inequity of this model is working in comparison to what financial advisers have to complete in relation to the provision of advice.
Does the person providing the phone advice to the member complete a full needs analysis, risk profile and assessment of expenditure, liabilities, assets, age of dependent children, schooling costs projected over what time time frame ? etc etc and then provide a recommendation to the member regarding the type, level and costs of the insurance cover compared to alternative options that may provide a significant financial differential at the point of claim all over the phone ????
Do they conduct a full investment risk analysis of the member and then a detailed asset allocation analysis and then present a recommendation over the phone ??
There are 2 playing fields here and they are definitely not level.

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