Industry divided on commissioner
Fund managers are divided over whether they should help the Government fund the Office of the Retirement Commissioner.
When the office was established, it was jointly funded by the Government and fund managers, with 10 managers paying $100,000 each annually. However, no managers are now funding the office.
Finance minister Michael Cullen says the issue of the office's funding is "a real problem" between the Government and the industry.
His view is that the funding arrangements for the office should be a partnership between industry and Government, however the industry isn't too keen on the idea.
BT Funds Management chief executive Craig Stobo says BT withdrew its sponsorship as "economically it didn't stack up".
While he thinks a partnership between industry and government is a laudable idea, he doesn't think there is sufficient private benefit for a firm like BT.
He reasons that BT, which promotes unit trusts, is a niche player against the backdrop of the ORC's broad savings message.
Stobo says he would like to see public policy changes that help the industry and put the various products on equal footing. Some possible changes include capital gains tax and "much lower taxes all around."
"We wouldn't have to have a Retirement Commissioner if the savings environment was tax neutral," he says.
Likewise Armstrong Jones boss and Investment Savings and Insurance (ISI) chairman Paul Fyfe isn't in favour of the private sector funding the office. (AJ has never funded the office, instead it has put money into its own educational material such as itsFinancial Passagesbook).
Fyfe says the ISI has made it clear to the finance minister that it considers the ORC should be fully funded by the Government.
He argues it's very hard for all the industry to get behind the ORC when the office is being supported by a firm's competitors.
AXA chief executive Ross McEwan takes a contrary view. He says the two reasons AXA stopped sponsoring the ORC was because not all industry players were helping to fund the office and the education campaign wasn't broad enough.
He says some fund managers were getting a "free ride" from their competitors who were fronting up with sponsorship dollars.
The other main concern was that the government wasn't doing enough.
"Not enough has been put behind (the ORC) from a government perspective."
Recommended for you
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
Amid the current financial adviser shortage, advice firm Link Wealth is looking to expand its financial literacy program for high school students across the country.
TAL Risk Academy has updated its range of ethics courses to help financial advisers meet their CPD requirements following adviser feedback, including interpreting FSCP determinations.
