Compare the Pair Financial Services Royal Commission Superannuation

The Financial Services Royal Commission will investigate superannuation funds next week. The usual large groups will appear, Bank owned funds, life office funds and others.

It would be fair to say anyone appearing at the Royal Commission has been savaged by Council investigating for the commission so it will be interesting to see what happens given the “Good Guys of Super” the Industry Funds will be appearing.

Is Commissioner Hayne getting the Industry funds to appear to show the others how they should be operating or will there be shocking revelations out of the Industry Fund camp as there has been from virtually every other person that has attended the Commission so far ?

Imagine the Commission doing there own Compare the Pair! Comparing one industry funds Balanced Pension fund with another Industry Fund Balanced pension? Imagine if one of the fund fees was 60% higher than the other fund. How would the Industry funds explain that, especially when they all piggy back off the one advertising campaign spruiking low fees. The community expectation would be that the fees of the Industry funds would be largely the same given the one generic advertising campaign.

Given 2 of the largest Industry funds are appearing imagine if the Commission lined up two Industry Fund Balanced pension funds with a Bank owned Balanced Pension Fund and the Bank owned fund had a lower cost than both of them and was nearly half the price of one of them.

Imagine if you were in a Pension fund and the most expensive investment option is the balanced fund. Given the balanced fund is generally the largest fund would the community expectation be that the balanced fund is the most expensive choice ?

I dont know what the commission will ask the super funds however i do hope they investigate some of the pricing of the Industry funds given the advertising campaign that the Industry fund network has been pursuing for a number of years.

One Editor of a financial publication wrote about how a financial planner was destroyed at the Royal Commission and one of the largest dealer groups has been shut down however the Super investigation should not become a Tit for Tat where Financial Planners may be hoping the Industry Funds get a touch up.

As a 30 year participant in this sector I am certainly hopeful that the Royal Commission will investigate without fear or favour and will bring light on any area that needs light shone on it no matter where the darkness is.

I have no doubt if there are bad things in a bank owned super fund then there will be big publicity and furore. I would expect the exact same thing to occur no matter where inappropriate behaviour may have occurred.

I would also like the Commission to investigate the profitability of the Industry Fund network given the Media constantly refer to the Industry Fund Network as the “Not for Profit” funds. The same media never referred to the pre listing AMP, National Mutual or Colonial as Not for Profit so why are the Industry Funds referred to as that? That is a media thing not an Industry Fund thing

With $600m in assets and over 5 million members i certainly hope the Industry Funds are making a very good profit so they can ensure they can maintain and improve their systems to manage their business and safely look after their customers.

I cannot wait for the hearings to begin.