ONE of the main messages of industry super funds' advertising campaigns has been the demonising of financial planners. But not all financial advisers are driven by earning commissions at the expense of their clients. Australian Super has recognised this fact.
Australian Super 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 moved its members into the new fund.
Australian Super has continued to grow through other mergers and by continually trying to improve its services. It was named the 2011 superannuation fund of the year and has grown to be the largest industry fund.
The 2011 APRA super analysis report, released in February this year, says Australia's four largest super funds are, in order of size, AMP/AXA, NAB/MLC, Westpac/BT and CBA/Colonial. Australian Super is fifth with more than $43 billion in members' funds.
The size of a super fund tends to be more a reflection of past success rather than an indicator of future success. One of the best indicators is the amount of net cash flows into a fund. Australian Super 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 difference between Australian Super and the other large funds is how cash inflows are generated. Australian Super does not have the large sales force and distribution system of the predominantly bank-owned funds. These retail funds disguise their sales force as advisers that in the main receive upfront and trailing commissions by signing up members for them.
Recognising that some advisers put the interests of their clients first, Australian Super in 2011 started a trial of accrediting financial planners, who had to prove their professionalism and sign a charter.
It is no coincidence that Australian Super'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). In signing the charter an adviser agrees to:
Work in the members' best interests.
Be strictly fee-for-service.
Provide an upfront schedule of fees based on the complexity of the work.
Require members to opt in annually.
Consent to be audited on quality and cost of advice.
Under the trial, Australian Super assessed about 250 advisers. Of that number 145 have become registered and only 75 have been accredited. Australian Super's board will decide in August whether to adopt fully the accreditation of financial planners.
The fund recognises there are other areas where services can be improved. One slated for improvement is the pension service. Australian Super realises that nearly all improvements in the past have been made to the accumulation service and it is time to focus on the pension service.
Anyone looking to get financial advice after July 1 now has a new question to ask a potential adviser: Are you an accredited planner with Australian Super?
Frequently Asked Questions about this Article…
What is Australian Super and how was it formed?
Australian Super was formed in 2006 when the Australian Retirement Fund and the Superannuation Trust of Australia merged. The Anglican Superannuation Fund moved its members into the new fund, and Australian Super has since grown through further mergers and service improvements to become the largest industry super fund.
How does Australian Super compare with bank-owned retail super funds?
Unlike many bank-owned retail funds that rely on large sales forces and advisers paid with upfront and trailing commissions, Australian Super generates cash inflows without that distribution system. The fund focuses on member-driven growth and has pursued adviser accreditation to promote professional, member-first advice.
Where did Australian Super rank in the 2011 APRA super fund analysis and how much did it have in members' funds?
According to the 2011 APRA report, Australian Super was ranked fifth among all super funds, with more than $43 billion in members' funds. The report listed the four largest funds ahead of it as AMP/AXA, NAB/MLC, Westpac/BT and CBA/Colonial.
Why was Australian Super ranked No.1 for net cash inflows in 2011?
APRA’s 2011 data showed Australian Super had the largest net cash inflows—$4.3 billion—making it No.1 for that measure. Net cash flow is a strong indicator of current member interest and future potential, and Australian Super’s inflows were almost twice those of some larger retail players.
What is Australian Super’s financial planner accreditation trial and who does it apply to?
In 2011 Australian Super started a trial to accredit financial planners who could prove professionalism and sign a charter. The trial assessed about 250 advisers: around 145 became registered and 75 were accredited. The fund’s board was scheduled to decide whether to adopt accreditation fully after the trial.
What commitments must an accredited planner sign under Australian Super’s charter?
An adviser who signs Australian Super’s charter agrees to work in members’ best interests, be strictly fee-for-service, provide an upfront schedule of fees based on the work’s complexity, require members to opt in annually, and consent to audits on the quality and cost of their advice.
How does Australian Super’s accreditation trial relate to FOFA (Future of Financial Advice)?
Australian Super’s adviser accreditation trial coincided with the federal government’s FOFA reforms aimed at improving financial advice standards. The trial’s requirements—such as fee-for-service models and annual opt-ins—align with FOFA’s push for clearer, member-focused advice.
What should everyday investors ask a potential financial adviser when considering Australian Super?
A practical question for investors is: 'Are you an accredited planner with Australian Super?' Accreditation signals the adviser has agreed to fee-for-service arrangements, annual opt-in requirements and independent audits—measures designed to put members’ interests first.
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