Weaven calls for independent research on fees/commissions
Garry Weaven
Industry Funds Services executive chair Garry Weaven has called for independent research on a selection of superannuation fund members to show what fees they are paying and how their fund is performing.
He was responding to criticism by Financial Planning Association (FPA) member and Count chairman Barry Lambert at the FPA conference that adviser fees for superannuation meant members were being put into expensive fee-driven retail products.
“We would support research on actual members in industry and retail funds, and let’s see what is left in their accounts after the fees have been taken out,” he said.
It is not known if the FPA will take up the challenge as chief executive, Jo-Anne Bloch, made no mention of joining a survey in her closing remarks at the conference.
Weaven argued commissions paid by superannuation funds on planners’ approved lists were too high, and because industry funds didn’t pay commission planners did not use them.
“The problem for the financial planning industry is it’s carrying the baggage of selling products,” he told a hostile audience.
“So instead of a professional providing a service for a fee, the industry has been overshadowed by its selling baggage.”
Weaven accepted that some advisers do provide good advice, but argued the industry is driven by product selection, which is influenced by commissions.
Lambert said Count tried to put industry funds on its approved list, but because of a lack of research it was unable to do so.
He said Count had looked at the MTAA industry fund, but could not find research on some of the investments the fund made.
“This fund has $63 million in infrastructure, but there is no research available on these investments,” he said. “We are trying our best to give advice on these funds, but if we haven’t got the basis for that advice, then we cannot approve the use of industry funds.”
Weaven argued that there was research available on unlisted managers and that Access Economics had researched all infrastructure investments made by industry funds.
“You can get all the research on industry funds you need,” he argued.
“What is important is the fee structure and the asset allocation, and you can easily find out about that from the fund, it is not rocket science.”
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