By Mike Taylor | Money Management | Tuesday, 20th October 2020
A major industry superannuation fund has declined to tell a Parliamentary Committee how much revenue it generates from financial advice, claiming it is both commercially sensitive and that disclosure would not be in the best interests of members.
Big health industry fund, HESTA has told the House of Representatives Standing Committee on Economics that it currently employs five financial advisers, who are remunerated on a fixed salary.
“HESTA is proud to deliver advice services for members at low prices so that cost is not a barrier for members seeking advice,” it said. “Most members of HESTA will benefit from advice on their accumulation account – the cost of this advice is contained within the standard administration fee. HESTA aims to keep the cost of advice on holistic financial planning as low as possible, but at commercial levels.”
“The budgeted cost and actuals for financial advisers is in HESTA’s view appropriate for the provision of advice to members. These figures are commercially sensitive and we do not consider it to be in our members’ best interests to disclose such information,” the fund said in response to questions on notice from the committee chairman, Victorian Liberal back-bencher, Tim Wilson.
“As an AFS [Australian financial service] licensee, HESTA must ensure that representatives are adequately trained and competent to provide the financial services authorised under their AFSL. This includes obligations concerning continuing training. ASIC’s expectations regarding continuing training are detailed in RG 146.
“HESTA’s employee remuneration for financial advisers employed to provide non-intrafund to HESTA members is fair and reasonable, and benchmarked against industry. HESTA notes that many of the costs associated with providing financial advice (including costs relating to marketing, administrative support services, professional insurance and indemnity, compliance oversight, legal oversight and regulatory oversight) form part of HESTA’s broader costs, which would not change substantively if HESTA were to cease providing financial advice.”
The fund revealed that while it was paying five advisers to deliver holistic advice, it had just over 22 people providing intrafund advice.