Industry funds pursue advice modelling unconstrained by regulation

Industry funds body, Industry Funds Services (IFS) is adopting a blank canvas, regulation-agnostic approach to how affordable advice can be delivered in an exercise that takes in a consulting group, consumer advocacy groups, financial services tech companies and superannuation funds.

And according to IFS chief executive, Cath Bowtell the final outcome will not necessarily be focused on extending the scope of intra-fund advice or general advice but might equally come up with a new design not constrained by the current regulatory guard-rails.

In a message to its industry funds constituents, IFS has declared: “We’re taking the shackles off, and are exploring a financial advice offer for super fund members that’s no longer constrained by ambiguous regulatory frameworks”.

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In an interview with Money Management, Bowtell said that what IFS was trying to do was look at how it could rescope advice around what members needed and how it could be most effectively delivered if it were unaffected by the restraints imposed by the current regulatory regime.

“That’s the task, to look at the service that could be delivered in a regulatory agnostic environment with consumers and what they need at the forefront,” she said.

The IFS message to its constituents said that it would be “working with Right Lane Consulting, some well-known super funds, consumer advocacy groups, technology partners and research companies”.

“Our task is to look beyond today and identify how advice will need to be delivered in years to come. Most importantly, next steps will be to test new and innovative service models that cater to the large group of people who are unable to access the financial advice they need,” it said.

Bowtell said that it was too early to suggest what the outcome might ultimately be, but that the task was to design some models and see how things might look if the existing regulatory frameworks were not actually there and the process was beginning with a blank piece of paper.

The IFS-sponsored exercise comes at the same time as the Australian Securities and Investments Commission’s current “affordable advice review” and at the same time as the Government is pursuing the objective of more affordable advice.

Bowtell acknowledged the ASIC exercise but not that it would be working from the premise of the existing regulatory regime, while the IFS project was looking at a broader scope.




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IFS, how about trying to develop this "new design" advice model in the real world, where non-advised superannuation fund members don't cross-subsidise the cost.

Cool, thanks IIFS and Consumer Groups. I'll be taking an agnostic view towards our compliance with ASIC, AUSTRAC, AFCA, TPB, FASEA, etc also. I did not know that was an option. This will drastically reduce our costs and make advice more affordable, just like ASIC wants. Boy, have we been barking up the wrong tree.

Haha you saved me typing out something similar. My god how easy is life when you abandon the regulations and start with a blank slate! I’ve never been big on doing SoA’s so, I’m just going to stop. And you know what’s always slowed me down? Client meetings and fact finds, in the bin with you too.

Maybe that's the decision Craddick made in Sydney. Call yourself a planner and throw the rest out the window.

@DukeNukem, it's not only industry super but also non-union FPs who are fed up with over regulation. In fact, the AIOFP will launch a campaign next week to unseat federal Liberal MP Tony Smith as part of a focused push to get rid of Coalition politicians from marginal electorates to protest against regulation of the industry.

This is basically union super saying they want to continue giving the same conflicted, inappropriate advice they have been giving for years while ASIC has looked the other way. They must be worried that the govt will start making ASIC enforce the law against union funds.

The union funds have always operated knowing that the rules don't apply to them and ASIC simply lets them do what they want. This was always the understanding, but now they are so bold as to release documents clearly stating they don't care what the rules are, and ASIC, APRA, the government etc, aren't going to do a thing. Just remember that as you pay your next ASIC invoice, and read about another adviser banned for providing a FSCG with one typo.

Now the Haynes No 2 Bill has been passed, where advisers must obtain informed consent and annual opt-ins for ongoing advice fees, when will the Fed Govt introduce reforms to ensure ongoing "intra-fund advice" fees meet the same requirement? MySuper Industry Fund members are now being charged over $100 million pa in ongoing "advice" fees, where millions of industry fund members are paying ongoing fees of no service, and without providing Opt-Ins for these ongoing fees. This hidden intra-fund fee scheme must end.

@steve, I would encourage to join us at the AIOFP (if you are not already a member) as we need to tackle the regulatory issues that impact financial planners in a more significant way rather than the intra-fund advice situation. We need support to help SME advice practices have reduced compliance (e.g. 80 page SOAs, punative licensee audit regimes, etc.) and make it easier to actually be profitable. In fact, I really don't give a stuff about industry fund intra-fund advice becuase it has so little to do with running a practice where staff and bills still need to be paid!!!

@steve, I would encourage to join us at the AIOFP (if you are not already a member) as we need to tackle the regulatory issues that impact financial planners in a more significant way rather than the intra-fund advice situation. We need support to help SME advice practices have reduced compliance (e.g. 80 page SOAs, punative licensee audit regimes, etc.) and make it easier to actually be profitable. In fact, I really don't give a stuff about industry fund intra-fund advice becuase it has so little to do with running a practice where staff and bills still need to be paid!!!

Step One - spend enormous sums of members money on a decade long advertising program which defames financial advisers with misleading and derogatory BS, turning the media, public and politicians against us, despite actual clients continuing to rate our service on par with the most trusted professions.

Step Two - lobby for draconian regulations using left-wing buddies ie. ASIC, Kenneth Hayne, so-called consumer groups, unions and Labor to push your cause - thereby pushing bank out of financial advice and forcing thousands of financial planners to leave the industry or become ineffectual.

Step Three - complain that advice is no longer affordable for consumers, so propose a massive relaxation of the rules so these funds can step into the void with massively conflicted and biased advice, which will allow them to seize control of superannuation in this country, with enormous power over the financial services sector, infrastructure and publicly listed companies.

You have to admire the boldness and genius behind all of this. Just a pity that the Australian public will be the victims of this enormous heist.

Exactly, Giggity.

This is the carve out IFA's should get, not this conflicted vertical integration model which is Industry Super.

They are far smarter than the LNP, have killed the LNP with the rivers of gold flowing out of mandated SGC to mandated Union only Super Funds, that then syphon all the profits to related Administration, Fund Managers, Bank, etc that fall outside of SIS. Making hundreds of Millions profits for themselves and the unions.
Modern day Thug unions dressed in Pin Stripe suits.
Well played Labor and Unions you have killed Real Advisers and LNP at this game.
Yet somehow in the last 8 elections you have only won 2 ?

So using members money to fund "think tanks" is in the best interest of members, how? All they want is to pave the runway for their conflicted, vertical integration strategy, which we know how that went down with the banks.

I read the comments above and wonder why our associations, major Licensees & the retiring advisers over age 55 aren't taking legal action against ASIC for selective prosecution as the turn a blind eye to the thousands of breaches to the FASEA code, ASIC regulations, and the SIS Act where the IFA charge thousands of clients for fees for no services, never providing written advice for these fees??????

So I would like to know how REST had my deceased son as a contributor for 15 yrs knowing he had a non binding nomination (on a half yrly statement from REST) and, as beneficiaries, his parents (also on a REST statement) and yet he never had advice from REST that this meant he had no control over who received his super and insurance should he die. Never a phone call, or an email and yet took the money every month for 'advice'. Is this what the Hayne RC called "fees for no service" or did that only apply to AMP? Of course the Unions, Labor and Funds and their cronies want to get rid of LNP pollies. They are the only ones who are taking on this corrupt scheme. As usual the Australian sheep just keep handing over their money every week believing it's in their best interests to do so and REST and all cares about them. We now know how much corruption is in this country and the World. But remember, the sheep are waking up! In the next couple of yrs we might find a different story.

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