Industry funds reveal intra-fund advice spend

In response to questions from committee chair and Liberal MP Tim Wilson, funds including Cbus, MTAA Super, Prime Super and TWU Super revealed the extent to which they employ intra-fund advisers, as well as details around their remuneration and funding arrangements.

Of the four funds, Cbus was the largest employer of intra-fund advisers, having employed 24 advisers directly in the 2019 financial year. This was an increase of 4 advisers since 2017, prior to which the fund outsourced intra-fund advice services.

MTAA Super noted it employed 11 intra-fund advisers and had done so since 2018, with further phone and online-based intra-fund advice provided through an outsourced arrangement.

Prime Super stated that it employed two intra-fund advisers directly, while TWU Super used the services of just one intra-fund adviser who was outsourced from the fund.

While Cbus declined to give details of intra-fund adviser salary arrangements citing confidentiality, MTAA Super noted advisers fell into a salary band expected to be between $108,000 and $147,000 for the 2021 financial year.

However, the fund’s enterprise agreement noted employees who exceeded their KPIs were entitled to receive up to 2 per cent above the maximum salary band for the year.

Prime Super noted the “aggregated cost” of its intra-fund advice services for the 2020 financial year was around $770,000, including its two advisers’ full salary packages and eligible performance payments, as well as the salary of a business process manager.

The fund stated performance payments were available to both intra-fund advisers, and call centre staff who provided general advice, “based on overall business performance and individual contribution”.

Meanwhile TWU Super noted their outsourced intra-fund adviser’s salary came in at around $107,000.

In terms of funding, Cbus also declined to answer a series of questions around cross-subsidisation of advice from its members, saying it was “unclear what information is sought” by a series of Mr Wilson’s questions.

MTAA Super noted that the cost of advice was listed as an expense on its annual report to members, but that technically no fees were charged that related specifically to intra-fund advice.

Prime Super stated that its intra-fund advice offering was “a service offering” that all members had access to, and that “all service offerings of the fund are funded by the established member fees”.