REST announces insourcing of general advice services

Major retail industry superannuation REST has announced it will insource its general advice services.

The fund announced the insourcing today stating that the move would help the fund connect with members more effectively.

The fund said it was it was currently recruiting regional managers to lead the relationship management of large employers with a new team formed within REST’s advice and education team to provide phone-based general advice services to members.

Related News:

The fund’s announcement said the team would support members according to their needs, whether it was providing them with information, directing them to online tools or booking them in for a session with the fund’s personal advice team.

General advice needs have conventionally been handled by super fund administrators.




Recommended for you

Author

Comments

Comments

Yep here we go, ASIC has already indicated an expansion of Intra Fund Advice.
And somehow product information is allowed to be called general advice ?
Why because how Industry Funds provide a bucket load of AFSL Advice with zero compliance by call centre jockeys with zero qualifications.
Kill Real Advisers with STRANGULATION BS REGULATION.
At the same time green light Industry Super, hidden commissions of Intra Fund and General Advice = Product sales, tied agent sales forces, single product offering, no BID, no FARSEA compliance, no AFSL compliance.
For F##k sake the REGULATORY CAPTURE CORRUPTION IS BEYOND DISGUSTING.

What a nice way to sell product - call it advice so the member thinks they are being helped and charge them all for the privilege.

Treasury must be so proud of themselves. No conflicts here - move along.

The majority of advice given is likely to be illegal, unlicensed, personal advice. But because it's done inhouse by a union fund, ASIC will ignore it.

ASIC's resources will be fully deployed on persecuting licensed advisers if their FDS is a day late or a few cents out.

Where are you on this rubbish Xavier?

IF ASIC was serious they would call the call centre and test how much personal advice was being given under the guise of general advice. We all know the answer here, so does ASIC, but no doubt nothing will be done to upset their union fund mates.

Remember that silly old saying about being doomed to repeat history if you forget it?

Super funds running full vertically integrated systems internally simply replicates the old mutual funds setup. These funds found that the only way they could operate effectively was to use a commission to replace otherwise fixed internal costs. That is, distribution, advice and services.

Fixed internal costs are subject to dislocation in recessionary or contrary times. Australia has been recession-free for so long that these basics are forgotten. The point of external provision of variable costs is to provide greater certainty of earnings regardless of market.

And so we have vertically integrated super funds reflecting the old mutual funds. Eventually, same mutual funds became subject to the Animal Farm effect, whereby the CEO's became kings of fiefdoms accountable to no-one (the modern equivalent is "profit for members", when members do not receive that profit). The term mutual became synonymous with cronyism, as management started equating 'biggest' with 'best'. And that all ended when said management did a terrific job of blowing up a century of prudent policyholder reserving.

We're nearly there now.

For all the foolishness about scale and member benefits, there is absolutely minimal change at the member level. Huge funds merge to become massive funds, and management take geometrically larger pay packets. Tiny accounting methodology changes allow vast levels of cash to be channeled to pet or ideological or fad projects. The individual member feels more and more comfortable being part of a larger, apparently more secure business. The business feels larger and more secure so it invests more money into unlisted, illiquid, difficult to value assets. And yet the individual member is at best, marginally better off.

The only true scale to be obtained is via a universally applicable pool. Otherwise, standard moral risk prejudices actuarial assumptions which underlay all true attempts at scale.

Super funds should be able to provide general advice and basic personal advice, too. But the inherent bias should be better explained in ways the average person can understand (eg. I can help you with the investment decisions in your Australian Super, which is great, but you could be with HostPlus Balanced Index, which is $x's cheaper for you. I can't help you with that but i can help you with your investment choice in Australian Super).

Unless the costs of providing general and personal advice are tackled, super funds will have no choice but to introduce a universal advice fee as part of their basic admin fee.

And the full circle will be complete.

Vertical integration-> consistently the biggest problem in for profit and union products.

Limited advice RoA's being considered.

We striding with purpose back to the 1990's. IDIOTS.

Keystone cop regulators with no comprehension of what they are regulating, inherent philosophically and institutionally entrenched biases and a government so out of touch they can't begin to comprehend their own incompetence.

Only 57% of advisers have passed FARSEA with effectively one more go left each.

Welcome to the wasteland of devastation that is Financial Planning, and the country will pay a very heavy price for DECADES!!!

What a joke... it is impossible for an intrafund adviser to provide compliant advice whilst meeting the FASEA standards...standards 2, 3, 5, 6, 7, 9 are all breached!!!

This is one of the reasons union funds are using unlicensed call centre staff to provide advice. The FASEA Code only applies to
licensed advisers.

Here's a thought... maybe the penalties applying to financial planners should also apply to unlicensed people breaching the rules and ethics...

Add new comment