Fund breaks down barriers

TRADITIONAL barriers were broken between financial planners and industry superannuation funds last week.

In an industry first about 140 somewhat sceptical financial planners flocked to hear a presentation by Western Australia’s largest industry fund, Westscheme, hosted by the Financial Planning Association of Australia’s WA chapter.

FPAA WA chapter chairman Ben Devenish was positive after the meeting saying everyone would benefit in the future.

“[It was] excellent, there was a good turnout, there is genuine interest from planners to be able to cover that sector and it is only going to snowball, I think,” he said.

A lack of independent scrutiny has traditionally put financial planners off recommending industry funds, as opposed to commercial master funds, that pay a fee to independent operators to have their services rated.

However, many industry funds are outperforming commercial master funds and grabbing more and more of the investment market.

Over the past 12 months, according to recent research by SuperRatings, the median industry fund earned an additional 2.8 per cent net of investment fees and taxation, more than the median master trust.

Founded in 1986, Westscheme has $905 million under management.

Mr Devenish said it made sense that financial planners wanted to get on a sector that had captured a large share of the market

“Not all financial planners are interested in working in the market that industry funds operate in,” he said.

“But certainly the fee-based financial planners are and the majority of financial planners operate on a fee-based type of arrangement.”

Mr Devenish said with increased compliance and responsibility, the traditionally leaner industry funds were looking more at outsourcing financial planning rather than facilitating it internally.

Westscheme CEO Howard Rosario said the firm was happy to present information about industry funds rather than opinions.

“One of the reasons financial planners said they couldn’t deal with industry funds is that they don’t know anything about them,” he said.

“What we are trying to do is say we are prepared to be accountable for what we do and are prepared to support a function like this so as part of their professional training, financial planners know what Westscheme does.

“We want people to understand our product, we want them to not be misinformed about it.

“That can only be for our and their good as well.”

Mr Rosario said until recently assessment by ratings agencies had not been a focus because they were costly and of little value to members.

However, he said, as Westscheme continued to enjoy growth and success it had begun to investigate ratings agencies and more recently had been assessed by SuperRatings.

“Our investment strategy [recently] picked up good returns but also more and more employers are putting members into Westscheme,” Mr Rosario said.

“I think we will move on [increasing transparency] if we can see there was very strong benefits for our existing members in terms of accountability, transparency and disclosure.”


“We want people to understand our product, we want them to not be misinformed about it.”

-         Howard Rosario



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