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Vol.26 No.21 | June 7, 2012 | $6.95 INC GST
The publication for the personal investment professional
www.moneymanagement.com.au
GOVERNMENT’S SUPER MUDDLE: Page 10 | HEART ATTACK TERRITORY: Page 18
ASIC recruits from within the industry By Milana Pokrajac THE Australian Securities and Investments Commission (ASIC) has confirmed it has increased its efforts to better understand the inner workings of the financial planning industry by recruiting from within the sector. Money Management understands former employees of small practices and institutions such as AMP have been poached by the regulator in recent months. “While I don’t have exact figures to provide, I can say that ASIC’s financial advisers team has a strong diverse skill set,” said Danielle McInerney, a spokesperson for ASIC. “It has people with many years of industry experience such as lawyers, financial planners, risk and compliance managers.” This apparent move by ASIC was welcomed by the financial planning industry. “A combination of having people
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with experience inside the team and engaging more with the industry can only help them better regulate the industry,” said Dante De Gori, the Financial Planning Association’s (FPA’s) general manager for policy and government. “There is a lot more that could be done – resourcing is a constant, ongoing battle – but this is a good start and a good step,” he added. The change in the regulator’s approach is also reflected in the availability and willingness of ASIC’s senior representatives to speak at events and attend roadshows, according to the Association of Financial Advisers (AFA) chief executive officer Richard Klipin. “The shift to recruit people from within the industry with strong experience is to be applauded,” Klipin said. “We were always of the view that the regulator has a strong and key role to play and the closer the industry and the regulator are in terms of the focus,
Dealer Group Poaching
Proportion of planners approached to change dealer groups
strategy and activity, the better the outcome for the industry – but most importantly for the consumer.” Both De Gori and Klipin have also noted increased efforts by the regulator to consult with the industry, the most recent example being the financial planning shadow shop exercise conducted by ASIC. Apart from engaging ASIC’s Consumer Advisory Panel, which was established in 1999, the regulator also employed a socalled ‘expert reference group’ for oversight, members of which came from advice groups and superannuation funds initially nominated by the FPA, the AFA and the Association of Superannuation Funds of Australia. “The group assisted in defining the quality of advice benchmarks and provided guidance on the grading of the advice, including calibration with industry standards,” ASIC stated in its Continued on page 3
Turf war hits nearly half By Mike Taylor
Not Approached
44%
50%
Approached
6%
Don’t Know Forty-four percent of planners report that their practice has been approached in the past few months by a rival dealer group asking them to join them. Source: Wealth Insights
THE extent of the current dealer group turf war has been revealed by new Wealth Insights research revealing around 44 per cent of the planners surveyed had been approached to move to a rival dealer group. The research also revealed that those most affected were planners within the Count Financial group recently acquired by the Commonwealth Bank – which is known to have been targeted by BT Magnitude. Wealth Insights managing director Vanessa McMahon said that of the Count advisers covered by her company’s survey process, 74 per cent said they had been approached by a rival dealer group to change allegiance in the past few months. However, she pointed out that Count planners were
MULTI-MANAGER FUNDS
Taking a fresh look THE dispersion between returns across the multimanager funds sector has been at its widest for a number of years, which could be a direct result of some – but not all – multi-managers taking a fresh approach to investing. The revised approach generally involves ditching strategic asset allocation and growth/defensive labels, and introducing more flexibility and dynamic responses. Many have rebranded themselves from multi-manager to multi-asset funds. According to Lonsec, returns vary from -6.9 per cent to 3.9 per cent, with active management generally resulting in better performance – though recurring declines in equity markets made life difficult for many. The costly nature of activelymanaged products has been out of favour with advisers and investors, but the revised structure of multi-managers might make for a perfect product in current market conditions. This was represented in relatively healthy inflows over the past year – at a time when managed funds generally suffer – but the ongoing volatility still impacts both adviser and investor sentiment towards actively-managed products. Despite difficulties with fund flows faced by the broader funds management sector, multi-managers believe they are better placed than many single strategy or asset class managers. For more on multi-manager funds, turn to page 12.
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