QSuper ceases comprehensive advice

3 July 2020

QSuper will cease to offer comprehensive advice to new clients and as a result will make 23 paraplanning-related roles redundant in August 2020 and 32 other support roles will be affected by October 2020.  

In a statement to Money Management, QSuper said a review found that the demand for comprehensive financial advice from members and non-members was a decreasing and was used by less than 1% of QSuper members over the past three years. 

A QSuper spokesperson said: “There will be job losses as a result of this decision, so it’s not a decision that we have made lightly.  

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“As a result of ceasing the comprehensive advice service, 23 paraplanning-related roles will be made redundant from the end of August 2020. 32 other support roles will also be affected by October 2020.  

“Right now, our focus is on supporting affected staff and, as a first option, finding a new role for them within the QSuper Group where we can. We will work with each staff member affected to support their wellbeing and their career.” 

Existing comprehensive advice clients would be able to continue using the service for the remainder of their current agreement and would be provided assistance to ensure their advice needs were met in the future.  

The review found that members wanted advice about their investment strategy, ways to make the most of their QSuper account and help with retirement planning. 

Commenting, QSuper chief executive, Michael Pennisi, said: “As a result of the review, QSuper has significantly expanded the personal, over the phone financial advice service available to members which is provided at no additional cost to the member.  

“The expanded service provides advice on topics including establishing an account-based pension; commencing a Transition to Retirement strategy; and advice related to retirement income projections. 

“Since we expanded our over the phone personal financial advice service, we have seen a 35% increase in demand for the service. This change has made personal financial advice more affordable and accessible for our members in the current environment.” 

Pennisi noted that the fund had increased the number of advisers available for over the phone personal advice appointments and had expanded topics related to its super products members could discuss. 




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"the fund had increased the number of advisers available for over the phone personal advice appointments"
Not sure how they can get away with this.

intrafund advice? which is common amongst all types of funds (government, industry, corporate and retail)

Surely this is a reportable breach...where is ASIC.

"members wanted advice about their investment strategy, ways to make the most of their QSuper account and help with retirement planning.The expanded service provides advice on topics including establishing an account-based pension; commencing a Transition to Retirement strategy; and advice related to retirement income projections" ....am i missing something??? What now constitutes comprehensive??? Why would i study for 6 years and put up with all the risks associated with running a business when i can get an Intra-Fund Call Centre job. How technical does it have to be to be called Comprehensive now??

Comprehensive is a catch all for anything non-intrafund. Eg. ordinary investments, estate planning, tax advice, smsf etc etc

“The expanded service provides advice on topics including establishing an account-based pension; commencing a Transition to Retirement strategy; and advice related to retirement income projections. "
How do they intend to provide advice with no Financial Advisers? Over the Phone?

Same laws apply to intrafund that applies to any other financial advice - gotta be licenced (and therefore qualified).

"Same laws apply to intrafund that applies to any other financial advice"
Your wrong.
Does an SOA need to be provided?
For example, does BID apply?
Does the fee charged for the Intra Fund advice need to be disclosed in an FDS?
Can the client opt out of the Intra Fund advice fee?

Your wrong. - No he isn’t.

Does an SOA need to be provided? If personal advice, yes.

For example, does BID apply? Yes.

Does the fee charged for the Intra Fund advice need to be disclosed in an FDS? Can’t issue a fds if not charging a fee.

Can the client opt out of the Intra Fund advice fee? Nope, because it ain’t a fee - it’s a cost to the fund.

Hahaha "comprehensive advice" that's the funniest thing I've heard all year!

Go see a "financial planner" and make changes on your QSuper account and QSuper Insurances because apparently they are in he best interest on the client... oh wait, the best interest duty doesn't apply to them.

The ultimate example of a vertically integrated business and the type of business that should be shut down!

I can understand why they are closing this service, my concern is that that are able to provide:
"personal financial advice service over the phone'
"no additional cost to the member"
"on topics including establishing an account-based pension; commencing a Transition to Retirement strategy; and advice related to retirement income projection"

which is all personal advice tailored to the client - why are super funds able to subsidies the cost of this advice? and charge no direct fees to the client
All members are paying fees in QSuper but not all members are utilising the phone advice service, essentially fees for no service.

"why are super funds able to subsidies the cost of this advice'

It is called intrafund advice... which is perfectly legal... WHy do all members have to pay for a call centre, even if only few members actually call? likewise for online services.

"WHy do all members have to pay for a call centre, even if only few members actually call?"
We had that argument with Commissions and lost - so do tell me why all members are paying for a service they may never use?

Perhaps you lost the argument, because it wasn’t a good argument? (I support insurance comms)

You aren't sure how a fund can employ advisers to provide intra fund advice? Any fund can do that and most have been doing so for years.

Intrafund advice cannot be personal advice though, that's the whole concept, it's only advice about the members existing account with the fund. There's no way the establishment of a TTR strategy can fall into the intrafund advice bracket.

Yes it can, and it does.

Based on what ASIC has stated, this is a reportable breach. I would hate to be the Responsible Managers at QSuper or the CEO. What they are offering does not fall under intra fund advice. It is also a breach of FASEA. What will ASIC, fasea, fpa and afa do to protect the financial planning industry in this instance?

What????
The areas listed here are not deemed to be comprehensive financial advice ???????
Over the phone advice regarding investment strategy, transition to retirement, retirement planning ???
This is becoming absolutely ridiculous regarding the type of advice these funds are being allowed to provide.
The playing field between this intra-fund advice process and financial advisers requirements is simply no longer acceptable.
Something must be addressed regarding the inequity regarding the provision of advice.

More affordable, at $0.00 cost. WTF Asic?

People don't know the difference between comprehensive advice and when they're being sold a super fund. Far easier & cheaper for Qusper to just sell super funds with a disclaimer. You planners have something called the FPA that should stamp this. One rule for you and another for Qsuper et al. Oh wait....another fat cheque and a list of call centre "adviser names" will buy their favor & will ensure people will be continued to be "sold" super funds & strategies over the phone. FPA did this with the banks and now they're ranks will be swelling with Call centre staff. Rinse and repeat.

FPA Ben Marshan (head of policy) supports Intra Fund Advice. Whilst he and Dante continue to support Intra Fund advice, I cant support the FPA or see a future for independently owned Financial Planning practices as it will be dominated by product sales Intra Fund advice.

This my friends is the core reason why advisers are exiting our industry. Why would any prospective client in their right minds want to use the services of an "independent" adviser when the can get advice from their super fund "adviser" for free.
There is only a very small and decreasing market for financial advisers to target - very difficult times indeed.

Honestly, if any adviser actually thinks an intrafund adviser competes with comprehensive advisers... you are very insecure. Intrafund is a service, and a valued service. They provide great advice for EXISTING members, who just dont have the need for holistic, comprehensive advice. Their needs are simple, and can be given in a very cost effective manner - arguable these people wont pay $4K+ to get advice - I'd prefer they get advice over no advice at all.

Intrafund is not a sales channel, its a service channel. Now, if you disagree with Intrafund as a concept, I get that - but attack the legislation that allows it, not the funds (retail, corp, industry, govt), that do it.

The problem is that they aren't responsible for acting in the client's best interest. The management are well aware of this and play that game that the BS legislation allows rather than actually looking after the client. It's smoke and mirrors and strategic sales tactic based around retention - otherwise why would they not recommended trauma, TPD own occ, IP superlinking...

I dont see how this is different from a bank selling their own super/insurance products.

When you consider that the vast majority of the population only has super (and maybe a house) as their only assets by the time they retire you can understand why intrafund advice is way more in demand than comprehensive advice.
Which is why I made the point that the market for comprehensive advice is small (compared to the demand for comprehensive advice which takes into account non-super assets).

Gee, almost sounds like you are the qsuper spokesperson with the amount of defending going on here...or perhaps just an employee of qsuper hey....interesting, potentially conflicted, take on a few elements here and likewise it would be an intetesting take if FASEA code was actually policed as to how this expansion of intrafund would be viewed...wonder how much consideration is given to the appropriateness of the product for instance...I'd be tipping absolutely none. It can be a useful service, dont believe it should be bundled into an administration fee however - that's a bit rich. If you want advice, pay for it...its not part of administrative duties for qsuper. But while most funds pull back from intrafund, there will be others that push the envelope and the spin will be it's all for the members and what they need hey...heard it all before. wash, rince, repeat. But good luck with the venture headshaker, hope it works out and it is actually in the interests of the members...not just looking after their needs within the intrafund scope...

There seems to be quite the misunderstanding amongst this group of qualified and well-informed advisers on this thread. Intrafund advice is personal advice. It is limited to certain topics that are related to the person's fund from which they are seeking the advice.
Advisers employed to do this job are just as qualified as you, and also have to meet the regulatory requirements of TASA, FASEA and the rest, SoA's, FSG's etc etc.They are not RG146 graduates, they are most likely people with years of experience, choosing this path as a step away from the direction of their long, (probably) retail careers.
As Headshaker points out, they don't compete for your business, - the were never going to seek the services of a comprehensive planner (but may well once they see the value in a]dice and are referred on). What's with all the bitterness?

The bitterness is the fact that it's not a level playing field.
RC & remediation outcome: Bank Advisers advised on and sold the house product = bad.
Current industry practice: Super fund employed Advisers advise on and retain the house product = good
Advice to buy, sell or retain a financial product is financial product advice.

Dear Ken, I agree with many of your statements, however the redundancy of 23 paraplanners would seem to indicate that Qsuper is reducing the SOA's and other requirements of advice. I think 23 redundancies is extremely concerning and indicates a massive reduction in complexity of advice. I really can't see people continuing to provide the same quality of service if you make 23 paraplanners redundant???

In theory you are correct Ken. However in practice much intrafund advice is given as general advice, not personal advice. As such, there is no need for the advice provider to be qualified or licensed, and there is no need for an SoA. It can be given by low cost, script driven, call centre staff. Hence the reductions in qualified staff at QSuper. This is a huge loophole being exploited by super funds. "General advice" needs to be abolished.

Clearing the decks for the no-so-secret merger with Sunsuper it seems.

Makes sense - surely a major super fund offering comprehensive advice is counter intuitive anyway. if you're gonna invest in super, put it in the managed fund options and trust the judgment of the fund you've chosen as an individual out of the many choices available to you. If you don't trust their judgment yank it out and go self managed.

I bet ASIC even use a different "criteria" for evaluating the quality of the Intrafund advice. Or have ASIC not reviewed compliance of intrafund advice yet? Where is "missing in action" Hume as the person in charge of ensuring the industry is well run and policed correctly?

Very sad for the individuals who have lost their roles. Having observed that organisation and it’s leadership it recent times, I think the members are better off for this decision. They were unfit to be running an advice business.

Not sure why any adviser is upset about this. First point is this is basically Qsuper admitting they don't want to deal with either alternative product/strategy requirements or clients non super advice needs - which means a client with a genuine need will seek out a real FP for. The second is that I can recommend QSuper for the clients they are appropriate for without concern they will try to take the whole relationship as well. Sounds like a realistic and pragmatic approach to me.

Like!

These are the same muppets (QSuper) that justified why they cancel income protection when their member are terminally ill... "we've found that sometimes they want to continue to work"

Check page 28 of qsuper annual report - the funds expense for financial planning last year was $18 million

They are merging with sunsuper - who have a distribution model through Independent advisers. They don’t need in-house comprehensive planners - they just need to focus on being a good product and let advisers recommend them . This will see them drop their cost of advice significantly

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