Industry fund crosses floor on commissions
Industrysuper funds and financial planners are not supposed to mix. But that could change if Frances Magill, the chief executive of the South Australian-based Statewide Superannuation Trust, has her way.
Magill’s plan is to convince independent financial planners to recommend Statewide’s retail superannuation master trust, Auswide.
To do it, she is willing to do what no other union-backed industry super fund has done before: pay financial planners trailing commissions. That will put Magill out of step with the rest of the tight-knit industry fund community, which up until now has had a blanket ideological objection to paying sales commissions to financial planners.
But Magill is taking a more pragmatic approach, acknowledging that trail commissions are the only way to get financial planners to recommend industry fund products.
“We couldn’t afford to set up our own branch network [of financial planners] Australia-wide [to distribute Statewide products] and why should we?” Magill asks.
“Also, financial planners need to survive and I see commissions as payment for services rendered.”
Statewide has already struck a number of distribution alliances with financial planning groups, but Magill says the super fund is determined to seek more.
She says the rewards for financial planners willing to engage with a super fund like Statewide, which has well in excess of 100,000 members, could be substantial.
“We have got plenty of leads and we are sure that financial planners will be interested in those leads, but like other organisations, we are not going to necessarily give them to groups who don’t use our products.”
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