Super fund rules out external advice

Salaried planners preferred

By Christine St Anne
Mon 09 Jul 2007

Government super fund says no to external planners.

Local Government Superannuation Scheme chief executive Jim Thomas has ruled out using external financial planners fearing his fund could lose control of its member inflows.

"It is something we have considered. Our concern, however, is that these external financial planners will cherry pick our clients. They would also have more control over fund inflows and outflows and that's something we would not be comfortable with," Thomas told Sydney FPA lunch attendees on Friday.

Thomas was responding to a proposal from a financial planner hoping to place his clients in an industry superannuation fund. 

The planner suggested the fund could charge a one off advice fee that could then be paid to external financial planners.

Thomas said, however, that members were happy with the existing services at his fund and cited 75 per cent member retention as proof of this.

The superannuation fund employs a 20 strong internal financial planning team for its 80,000 members. Members who are clients of the fund's financial planners are charged a higher fee.

"This means members are not cross subsidising each other when it comes to financial planning costs," Thomas said.

"Because our fund's members have higher than average account balances we can afford to offer wide education services. Our members are offered education days one to two days a year by our fund," he said.

He also hit back at the FPA's counter advertisement to the industry superannuation fund's Compare the Pair campaign.

"The FPA's advertisement implied that industry superannuation funds only offer advice in the area of superannuation. Our fund offers a full suite of products including tax planning, debt recover and estate planning," he said.

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