Industry Funds Services (IFS) chief executive, Cath Bowell has directly questioned how many financial planning entities will remain when cross-subsidies are being removed in the wake of the Royal Commission.
Speaking on a panel during the Conference of Major Superannuation Funds, Bowtell also predicted that the Financial Adviser Standards and Ethics Authority (FASEA) code of conduct and code-monitoring bodies were likely to have more impact on the future of advisers in the industry than degree-minimum educational qualifications.
Discussing the future of the planning industry in the post-Royal Commission environment, Bowtell said she believed that the planning model being pursued by IFS and its associated superannuation funds would remain little-changed but suggested the situation was much more uncertain for other planning entities.
“It is a question whether some entities can survive in a world where cross-subsidies have been removed,” she said.
Elsewhere during the panel discussion, superannuation funds acknowledged that they too would be impacted by the tightening of the rules around paying ongoing advice fees from members’ accounts.
REST national manager of Advice Delivery, Greg Fleming said he believed his fund would be little affected in circumstances where 95 per cent of its advice was intra-fund, but HESTA executive, Member Engagement, Matthew Halpin acknowledged the fund would have to stop deducting fees from member accounts.
He said he believed this would add to the cost of providing advice which was something which might have to be absorbed by the funds.
Comments
The whole intra fund advice model is cross subsidised guys! By all members paying and only a small % using the service. Do these people actually understand what they say?
The obvious answer is all of them will survive. Independent advice businesses don't receive commissions last time I checked.
How are the industry super fund vertically integrated businesses different from those of AMP & the big banks? Are Industry Super fund advisers going to get their own carve out for BID in the intra-fund space?
Come on ASIC...
Give me strength - now IFS want to start a monopoly on advice too...BTW - surely they can't ignore the obvious cross-subsidisation of their own planning and advice arms??
Paul have you had met your KPI's for ME Bank Referrals???
Everything is playing out as predicted.....Strength to the Comrades at IFS, down with any adviser that runs their own business
Comrade Ben, will you wear all grey or brown suits. i don't want you to have to think every day what to wear. Wait - you cannot earn more than the next, let's take it off you.
There will be a lot of advice firms licensed under Product manufacturers that have had nothing but training and brainwashing by their puppet masters. These firms with their subsidized software, licensing costs and getting practice development support ultimately from a product manufacturer... they are the ones being hit hard by the Royal Commission and best interest obligations. The rest of adviser those directly working under a Product Licensee such as Bank planners and non aligned advisers I can't see any issues.
Unions/Labor&Union super funds are the biggest examples of cross subsidised rorting in our country.
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