Has the Industry Super Network (ISN) become the primary representative body for not-for-profit superannuation funds – or is that a role better performed by the Australian Institute of Superannuation Trustees (AIST)?
This is a question which arises out of the policy development relationship announced between the Financial Services Council (FSC) and ISN at the FSC’s annual conference in Brisbane in earlier this month in circumstances where the AIST and the Association of Superannuation Funds of Australia (ASFA) seemed oblivious to the arrangement prior to its announcement.
The FSC has always been front and centre in terms of financial services policy development because it is the representative organisation of the major institutional players, boasting a membership that traverses the major banking organisations and the insurers. In that sense, it has always been suitably differentiated from the activities of ASFA, which has maintained an entirely superannuation-related focus.
The differentiation between ISN and AIST is not so easily made in circumstances where both organisations boast a similar heritage, have from time to time had the same directors, and most of the time sing from the same policy hymn sheet.
In a very real sense, AIST has been seen as a competitor to ASFA – albeit that they share many of the same member funds – with both organisations providing policy and education services and supporting annual national conferences.
In fact, until this month’s FSC national conference, the ISN was the odd man out. It was widely regarded as nothing more or less than the political lobbying arm of Industry Fund Services which is, in turn, an over-arching entity for a vertically-integrated financial services business owned by a number of industry superannuation funds.
That vertically-integrated financial services business encompasses Members Equity Bank, Industry Funds Management and Industry Funds Financial Planning.
So does the relationship between ISN and FSC really reflect a liaison between an organisation representing a large number of vertically integrated financial services organisations (the FSC) and an arm of another organisation representing a vertically integrated financial services organisation backed by industry superannuation funds (ISN)?
If this is the case, then can these organisations lay claim to be developing policy for the superannuation industry as a whole – or just the sectoral interests which they represent.
Having said all of that, the objectives of the relationship between the ISN and FSC as expressed by their chief executives, David Whiteley and John Brogden, are laudable. Both men are correct when they assert that the best interests of members and the broader sector will be served if the industry speaks to Government with one voice.
However it must be remembered it was the ideological approach adopted by elements within the industry funds – and expressed via the ISN – which led to a deep policy schism between the not-for-profit sector and those representing retail superannuation funds.
Certainly, there are many in the financial planning industry who will never forgive the ISN for its multi-million “compare the pair” television advertising campaign.
Then, too, it is arguable that ASFA chief executive Pauline Vamos had every right to feel slighted by the ISN/FSC announcement in circumstances where her organisation boasts a membership that encompasses both industry funds and the major institutional players such as BT, Colonial First State and MLC, and has sought to develop policy approaches representative of both sides of the equation.
The chief executive of the AIST, Tom Garcia, might equally argue that his organisation is representative of more of the not-for-profit superannuation sector than is the case for the ISN.
The bottom line would seem to be that while the underlying objective of having the superannuation industry speak with one voice on policy is highly desirable, it will not be achieved when key players such as ASFA and AIST are left out of the equation.
Given the likely outcome of the forthcoming Federal Election and the possibility of significant changes to the status of default funds under modern awards, it will be interesting to see whether the dialogue between the FSC and the ISN will endure.
