The paper says industry funds have generally not developed the business infrastructure that optimises efficiencies in the advice process. Retail and corporate mastertrusts such as First Choice offer extensive support structures. On insurance, the paper admits that industry fund premiums tend to be cheaper for blue collar workers, but there are large cross subsidies which disadvantage women, white collar workers and non-smokers. Automatic cover for industry funds tends to be lower than some mastertrusts, such as First Choice. The paper says that industry funds generally do not offer the same range of product features that mastertrusts do. The broader range from mastertrusts includes: wider investment choice, auto-rebalancing, online adviser trading access, model portfolios, refund of contributions tax via S279D for death benefits, facilitation of adviser payments, insurance pre-assessment, online insurance tracking and payments of pensions to child beneficiaries.
Paul Barrett, Colonial’s head of distribution, delivered a presentation on the subject to a closed session at the largest dealer group’s conference, the PIS conference, in Las Vegas in March.