Is the war over? Advisers and AustralianSuper trial a new approach

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AustralianSuper flags a revolution in advice with adviser panel trial results

In a statement likely to have lasting implications for the financial advice and superannuation industries, AustralianSuper today declared that the FoFA reforms have created an environment in which the Fund and selected planner groups can work together in the interest of members.

The dramatic shifts in the advice and superannuation environments in the wake of the Cooper Review, the Ripoll Report and now the FoFA reforms, will lead to a shift in how Industry Super Funds and advisers work together, provided the FoFA reforms proceed in full. Although traditionally cast as enemies, according to Ian Silk, Chief Executive of AustralianSuper, the two groups should have strongly aligned interests.

Certainly the strong positive outcomes of a continuing trial involving AustralianSuper and a panel of representatives from some of Australia’s leading advice firms and dealer groups provides evidence of this.

“For the past twelve months or so we have been working with advice industry leaders trialling and building a new service that will enable us to work together more effectively and in the best interest of members,” said Mr Silk. “This includes addressing the vexed question of fees and other issues that have presented stumbling blocks in the past. Thus far in the trial we have worked through a number of these issues and will continue to do so as the trial continues over the next nine months or so.

“AustralianSuper has always been a major supporter of good, sound advice. What we do not support is the commission structure of so many super products that leads to conflicted advice. As we look towards new, clearer legislation relating to commissions and requiring an adviser to act in a clients best interest, we are seeing many of the more progressive advisers working to build fee-for-service and other models of advice into their practices.”

Mr Silk went on to say that AustralianSuper has always focused on providing better value super through lower fees and strong long term performance and by breaking down the wall with advisers more people will now have more money in their retirement.

“Essentially we see this as part of our broader advice strategy, along with our member education programs, online and workplace seminars, our call centres and the fund’s strong relationship with Industry Fund Financial Planning.”

Mr Silk said that, for advisers, the trial has opened wider possibilities for advising and meeting the needs of their clients, potentially saving clients tens of thousands of dollars in fees, enabling access to a leading fund and giving advisers more control over a client’s full portfolio.

“This may not have been as simple at a time where industry super funds and advisers essentially occupied separate worlds, so where a client held super outside the adviser’s remit, the adviser may not have had such an opportunity.”

Firms which have been participating in the trial include Godfrey Pembroke, Matrix Planning Solutions, Dixon Advisory, Woods & Partners, Paul Moran, Switzer Financial Planning. They have also identified a number of advantages of the approach so far.

Tom Reddacliff, General Manager of Godfrey Pembroke said, “We are delighted to be working with AustralianSuper and believe this strategic alliance benefits our two organisations, advisers and most importantly members.

“Godfrey Pembroke was the first major licensee to introduce fee-for-advice on all new investment and superannuation clients back in 2006. Our advisers believed this was in the clients’ best interests and was the right thing to do.

“This commitment to fee-for-advice closely aligns our organisations and makes Godfrey Pembroke a natural provider of trusted financial advice to AustralianSuper members. Furthermore, Godfrey Pembroke guarantees it will not receive a single cent of commission from any AustralianSuper member.”

Another participant in the trial, Rick Di Cristoforo, Managing Director of independently owned advice firm Matrix Planning Solutions, said “Matrix has always been committed to providing quality advice, including administration and product solutions that are best suited to our clients’ needs.

“Our research confirms our belief that industry funds can play an important role as an efficient and competitive superannuation solution for a wide cross section of working Australians, and in our view, AustralianSuper is a clear market leader.

“We are delighted to be working with AustralianSuper as part of this advice partnership.”

As the trial continues, the focus is on continuing to resolve various logistical issues associated with ensuring a smooth and workable proposition for all concerned.

Ian Silk further states, “What we are most pleased about is that the fundamentals are sound. We have the ingredients and commitment we need to meet our mutual aims and that can only be the start of a very good thing for members.”

This information is of a general nature and does not take into account your personal objectives, situations or needs. Before making a decision about AustralianSuper, consider your financial requirements and read our Product Disclosure Statement, available at www.australiansuper.com/FormsPublications or by calling 1300 300 273. AustralianSuper Pty Ltd ABN 94 006 457 987 AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898. ‘Industry SuperFund logo used with permission of Industry Fund Services (IFS). This consent had not been withdrawn as at the date of this publication.

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