Print Post Approved PP255003/00299
Vol.26 No.10 | March 22, 2012 | $6.95 INC GST
The publication for the personal investment professional
www.moneymanagement.com.au
MARGIN LENDING: Page 18 | SMSF ASSET ALLOCATION: Page 22
We’re not CBA captives – Count chief By Mike Taylor COUNT Financial chief executive David Lane has strongly denied the dealer group has become a captive of the Commonwealth Bank’s size and product set. In an interview with Money Management ahead of the dealer group’s national conference last week, Lane announced a series of enhancements to members of the group. These include cheaper platform fees and, crucially, expanding the benefits of Commonwealth Bank ownership and employment to the dealer group’s authorised representatives, as well as to selected small-tomedium enterprise clients. Lane said Count would be providing the authorised representatives and the owners of its member companies with “the exact same suite of services that you would get if you were a CBA employee”. “So things like 70 basis points off your
home loan, like a 20 per cent reduction on general insurance,” he said. “ They are things that as a CBA employee I know I use and I know that all my colleagues use, Lane said. However, Lane strongly denied suggestions that the leveraging of products and servicing offerings from within the CBA had served to confirm that Count Financial had merely become a subset of the big banking group. “I would absolutely deny that,” he said. “I am committed to maintaining an independent Count with an independent brand, with an independent location, with an accounting focus and with an open-architecture approved product list. “What it now has behind it is significantly more support than it ever had,” Lane said. “And having options and having choice is very different to not having choice.”
David Lane He said that while he may be talking about a suite of CBA services, this did not preclude Count members from talking to every other bank in the marketplace.
“We encourage it and we expect it of them because that’s the type of advisers they are,” Lane said. “But we’ve now put in front of them a very attractive package that we think is going to be very competitive with all the other financial institutions in the marketplace” Lane said. Among the other benefits outlined by Lane to the Count conference was that the dealer group would be providing its member firms with lending packages which would enable them to finance the sale of planning practices. “As an accounting firm, if you want to buy out one of your partners who wants to retire and you want to fund number two person into that role or you want to go out and buy another business, we have a set package,” Lane said. Count would also be able to act as a conduit via which small-to-medium enterprise clients could also access CBA products and facilities.
Platform review wins wide support Industry fund complaints By Chris Kennedy and Bela Moore
THE Australian Securities and Investments Commission’s (ASIC) platforms review has drawn support from a range of stakeholders for proposing providing additional consumer protection via capital adequacy and for placing the spotlight on other gatekeepers in the financial advice chain. ASIC last week announced Consultation Paper 176, which will examine the regulatory approach to investor-directed portfolio services, and proposes “additional requirements for platform operators to enhance investor rights associated with investments made through platforms”. Chief executive of independent platform provider OneVue, Connie McKeage, was highly supportive of the paper and said it was an area that required further attention. One of the greatest areas of conflict is between platform and manufacturer, she said. Some of the controversies that have afflicted the industry have been levelled at the advice part of the value chain – but the manufacturing component is also to blame, McKeage said.
Ian Knox “We’re absolutely supportive in understanding why certain products get on a platform menu and others don’t,” she said. “When platforms have manufacturers underneath or product providers, we would be looking for a consistent, level playing field for all manufacturers, with a common methodology by which someone can arrive at an outcome. Very much like a manufacturer needs to demonstrate their investment philosophy and process, I think the platforms should have to justify, as we do, the decisions they come by” McKeage said.
ASIC said the proposals aimed to strengthen operating requirements for platform operators, ensuring they have adequate resources to conduct their financial services businesses. Managing director of independent service provider Paragem Ian Knox said the consultation seemed to be an across-the-board effort to ensure appropriate capital backing was behind the industry, which would inevitably favour large institutions and publicly listed entities. Knox predicted that major changes would not be required for well-resourced institutions. He said the emerging challenge would be for third party entities and industry bodies like the Association of Independently Owned Financial Planners (AIOFP), which might be forced into providing capital adequacy requirements in their own products. The AIOFP last year launched a private label eWrap platform via its member-owned administration business, Personal Choice Management. Financial Planning Association general manager policy and government Dante De Gori also Continued on page 3
up, retail down By Tim Stewart WRITTEN complaints to the Superannuation Complaints Tribunal (SCT ) about industry funds increased by 25 per cent last year, while complaints about retail funds decreased slightly. According to the 2010-11 SCT annual report, there were 509 complaints about industry funds – up from 400 in 2010-09. While retail funds continue to receive the most complaints, with 735 in 2010-11 (down from 758 in 200910), over the last five years the trend has been clear: complaints are increasing for industry funds and decreasing for retail funds. Corporate Super Specialist Alliance president Douglas Latto said the different models employed by each sector helped to explain the trend. “Industry funds are very much a reactive model. They’re not out there providing personal advice in a proactive manner,” Latto said. On the other hand, financial advisers at retail funds are going out into the workplace to increase education and financial literacy, he said. The decrease in complaints at retail funds is likely because their members are better educated than their industry
Pauline Vamos fund counterparts, Latto added. Association of Superannuation Funds of Australia chief executive Pauline Vamos said the lack of a “middle man” in industry funds could result in members going directly to the SCT. “One of the obvious differences is that most people deal with their industry fund directly, and with retail providers there is usually an intermediary like an adviser,” she said. Continued on page 3