More superannuation funds should be considering bringing the provision of financial planning services in-house, according to the results of a new survey.
While many superannuation funds have chosen to enter into relationships with dealer groups and other third-party providers for the delivery of financial planning, a survey, conducted by Money Management’s sister publication, Super Review, revealed significant support for super funds to develop in-house capacity.
However, in terms of priorities for superannuation fund trustees and executives, bringing financial planning services in-house fell a long way behind their determination to take greater control of member communications.
The survey, conducted during the recent Association of Superannuation Funds of Australia (ASFA) conference in Sydney, asked fund trustees and executives what currently-outsourced functions they believed should be brought in-house.
While many funds have already insourced investment management, this rated as a somewhat low priority well behind member communications (79.4 per cent), financial planning (35.8 per cent) and administration (35.8 per cent).
Only 25.6 per cent of respondents cited bringing investment management in-house.
Despite the high use of outsource services by superannuation funds, survey respondents said they did not believe the arrangement was being over-used.
Comments
How can trustees of a product in source a service that is supposed to have no product bias at all? It cant be done with the best interest for clients test. Instos and super funds need to realise we arent just commodities to keep clients with certian products, we need to work in the clients best interest, sometimes that means taking clients away from that fund! Case in point, Mr Jones has a large balance with ABC fund the planner works for, the planner knows he would be way better off with a SMSF as he has lots of property he could move in and liquidate in pension phase ( for example), what we just sit there and say no cant do that? We cant have product bias, you can put all the education hurdles you want up, but if the relationship between instos that own product and planners is still that we are just there to sell products you will still see issues with the industry.
well the FPA and CBUS have an arrangement that must in part protect CBUS's interests, but called professional advice. The key is you have to put CBUS on your APL in order to actually get any referral work, so the FPA has tied advice to product, something it always espouses is not professional.
With the current exemptions in place for Super fund advice, this is not an issue. No SOA is needed if it is intrafund advice, or general advice. ASIC can't monitor it, becuause there are no SOA's. APRA do not look at this advice. So we have a classic hidden black hole, that is not even considered. As I said once before the commonwealth public service super fund that looks after ASIC people reports they have their OWN advisers even though they outsource the work to an external AFSL, while the advisers AFSL reports they have no associations with anyone. ASIC can't even see this is concern, but panic if I say I am "not associated with any large super fund". My conclusion is the super fund trustees and ASIC are in fact not independent of each other.
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