Commission system incompatibility

The industry superannuation funds movement has raised doubts about whether the commissions-based structures utilised by financial planning networks can ever be compatible with industry superannuation funds, following a decision by AMP Financial Planning to remove industry funds from its approved product list.

The industry superannuation funds movement expressed disappointment at the decision and attributed it to the incompatibility generated by commission structures.

AMP Financial Planning announced in 2004 that it would be including the industry funds on its approved list, but said it had decided to remove them because of low levels of client demand and the costs involved.

Reacting to the decision, funds spokesman Garry Weaven said he was disappointed but not surprised in circumstances where industry superannuation funds did not pay sales commissions.

“When AMP first announced it was including certain industry funds on its approved list, we foreshadowed that no business would be directed,” he said.

Weaven said AMP’s network of financial planners sold products to their clients and received sales commissions from those products, and in circumstances where industry funds did not pay commission there was no reason for planners to recommend an industry fund.