Members-first tack gets super result
One of the main messages of industry super funds' advertising campaigns has been the demonising of financial planners. Just as not all industry super funds are equal, not all financial advisers are driven by earning commissions at the expense of their clients. AustralianSuper has recognised this fact.
One of the main messages of industry super funds' advertising campaigns has been the demonising of financial planners. Just as not all industry super funds are equal, not all financial advisers are driven by earning commissions at the expense of their clients. AustralianSuper has recognised this fact.AustralianSuper was formed when the Australian Retirement Fund and the Superannuation Trust of Australia merged in 2006. As a sign that this marriage was blessed, the Anglican Superannuation Fund agreed to move its members into the new AustralianSuper at the same time.Since its inception, AustralianSuper has continued to grow through other mergers and by continually trying to improve its service offering to members. That it has been successful is evidenced by it being named the 2011 superannuation fund of the year and that it has grown to be the largest industry fund.According to the 2011 APRA super analysis report, released in February, the four largest super funds in Australia are, in order of size, the retail funds of AMP/AXA, NAB/MLC, Westpac/BT and CBA/Colonial. AustralianSuper is the fifth largest, with more than $43 billion in members' funds.The size of a superannuation fund tends to be more a reflection of historical success than an indicator of future success. One of the best indicators of this is the amount of net cash flows into a super fund. AustralianSuper was ranked No. 1 in the APRA report, with 2011 net cash inflows of $4.3 billion, almost twice the volume of fifth rated AMP/AXA.The main point of difference between AustralianSuper and the other large super funds is how cash inflows are generated. AustralianSuper does not have the large sales force and distribution system of the predominantly bank-owned super funds. These retail funds disguise their sales force as advisers, who in the main receive upfront and trailing commissions by signing up members for them.Recognising that some financial advisers put the interests of their clients first, AustralianSuper started a trial in 2011 of accrediting financial planners. For an adviser to be accredited, they had to prove their professionalism and sign a charter.It is no coincidence that the timing of AustralianSuper's adviser accreditation trial coincided with the federal government's push to improve the standard of financial advice with the introduction of FOFA (Future of Financial Advice) reforms. In signing the charter an adviser agrees to:work in the members' best interestbe strictly fee for serviceprovide an upfront schedule of fees based on the complexity of the workrequire members to opt in annually andconsent to be audited on the quality and cost of their advice.Under the trial, dealer groups were invited to apply, and about 250 advisers were assessed. A total 145 have become registered with AustralianSuper and only 75 have been accredited.A decision will be made by the board of AustralianSuper in August whether to fully adopt the accreditation of financial planners.AustralianSuper recognises that there are other areas in which the fund can improve its service to members. One area slated for improvement is the pension service.AustralianSuper has realised that nearly all of the improvements in the past have been made to the accumulation service and it is time to focus on improving the pension service.Anyone looking to get financial advice after July 1, 2012, now has a new question to ask a potential adviser: are you an accredited planner with AustralianSuper?
Share this article and show your support