MAGAZINE OF CHOICE FOR AUSTRALIA’S WEALTH INDUSTRY
www.moneymanagement.com.au
Vol. 33 No 19 | November 7, 2019
34
ETFS
Debunking ETF myths
INSURANCE
37
Insurance in super
RATE THE RATERS
ALTERNATIVES
Multi—factor strategies
ASIC spotlights third party advisers on super insurance messaging BY MIKE TAYLOR
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Lonsec again the preferred ratings house WHILE Lonsec has once again been labelled as financial planners’ favourite ratings house, this year’s Money Management Rate the Raters survey finds its popularity isn’t what it used to be with planners making room for new entrants and thus breaking the oligopoly. Lonsec this year was highly regarded for its quality of its staff, model portfolio capabilities, good value for money, consulting services, and fund and fund company and asset allocation research. Despite the research house being the top rated for six categories this year, it was a lesser result than last year. In 2018, Lonsec was the top-rated research house for eight categories. This year, Morningstar overtook Lonsec’s lead in client services and website tool and services. Lonsec’s gold spot in client services dropped to third place this year with only 42% of planners believing its service was ‘excellent’ or ‘good’ compared to 53% last year. Morningstar was also the unquestionable winner in the corporate strength category with 80% of planners rating it as either ‘excellent’ or ‘good’. While Lonsec won this category last year, it slipped to third place with only 63% of planners rating it as higher than average. The survey also found that the relatively younger research house, SQM Research, was making its mark by securing third place when it came to value for money, behind Lonsec and Zenith. SQM beat out long-standing research house Morningstar with over 45% of surveyed financial planners rating its value for money as either ‘good’ or ‘excellent’.
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Full feature on page 28
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THE Australian Securities and Investments Commission (ASIC) has claimed it has seen some examples of communications from third parties such as financial advisers about insurance inside superannuation which “have lacked balance and context”. In a letter sent to superannuation funds ahead of the Government’s implementation of its new Putting Members Interests First legislation, the regulator specifically referenced advisers and its ability to take action against them. Under the heading of “Other ASIC Concerns” the letter said: “ASIC has seen examples of disclosure from third parties about the reforms that have
lacked balance or context”. “ASIC can take action against third parties, including advisers, who make misleading statements about the changes. Trustees need to ensure that advisers and others that they interact with are provided with accurate information,” the letter said. The ASIC letter to superannuation funds has made clear that “communications should be developed with the member’s best interests as a priority” and suggested that members should not be left with the impression that the only option was to retain insurance. “Trustees should not solely communicate the benefits of one option. In particular, it may be important to explain why ceasing Continued on page 3
FASEA funding drying up FINANCIAL advisers should be bracing for another levy to fund the Financial Adviser Standards and Ethics Authority (FASEA) in next year’s Federal Budget because most of the major banks will no longer be there to do so. Over the past three years the bulk of FASEA’s funding has come from seven of the banks plus AMP, but only AMP and National Australia Bank (NAB) still have significant current wealth management interests in the wake of ANZ, Westpac, Suncorp and Bendigo largely exiting the space and with the Commonwealth Bank in the process of doing so. The FASEA funding arrangements put in place by the Treasury saw ANZ, Bendigo, the Commonwealth Bank, Macquarie Equities, NAB, Suncorp, Westpac and AMP providing total funding of $3.9 million a year but the arrangement will expire in May. However the Government has yet to flag how it intends to fund FASEA in the 2020-21 Budget year in circumstances where it has also Continued on page 3
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