Industry fund planners have conflicts too
Industry Funds Services (IFS) Financial Planning acknowledges that it has conflicts of interest, but it doesn’t see them as a problem.
The firm is owned by industry superannuation funds, and recommends them to clients wherever possible.
The fact its client base is mainly from industry funds also locks in these investment decisions.
General manager David Haines says the decision to favour industry funds is historical.
“The reason why IFS Financial Planning began was due to financial planners not recommending industry funds to their clients,” he says.
“The funds are often on a dealer group’s approved list, but the planners just do not use them.”
Haines says the financial planning arm has never claimed to be independent, although it does not rule out the use of other products.
“When we talk to the client, we make a balanced assessment of their needs, and sometimes another product might be recommended,” he says.
“But usually the industry fund is the most suitable product for a client, so we recommend that.”
Haines says the relationship between the industry funds and the financial planning operation is fully disclosed to the client.
“But most of the people who come to see us don’t sign up for the paid advice,” he says.
“Contrast that with the commercially owned dealer groups who want the further business.”
Most of the people coming to IFS Financial Planning are referrals from the industry funds and are usually members of an existing fund. Alternatively, they are members of the industry in which the fund operates.
“The people coming to us can see the benefits of being in an industry fund, such as the growth and low fees,” Haines says.
“So when we compare the industry fund to another product, the industry fund usually comes out better.”
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