AIOFP. The DASH/EQT relationship going forward and the FPS White Label ramifications.

Hi, some members have asked about the DASH/EQT relationship going forward and the FPS White Label ramifications.

There have also been questions around the Trustee role.

EQT’s recent announcement that it intends to exit the retail super trustee market has no material impact on DASH other than the fact that a new Trustee will ultimately be appointed for DASH’s retail super offering.

It is important to recognise that APRA would not permit an orderly wind-down that adversely impacts members. Accordingly, any exit by EQT would require the transfer of Trustee responsibilities to another appropriately licensed Trustee. In practical terms, this means that EQT’s role would simply be assumed by a replacement Trustee, with continuity maintained for members and platform operators such as DASH.

As a result, we do not view this development as creating any material operational or strategic risk for DASH. In any case, DASH are well advanced with replacing EQT anyway regardless of the recent announcement.

It is important to understand why an Independent Superannuation Trustee is far better for Financial Advisers and their clients than entering into an environment where the Retail Platform Manager [RPM] is both the Trustee and Manager.

Firstly, the ‘client owns the client’ notion is true regardless of where the client is located the objective is to demonstrate how Financial Advisers can be [and are] marginalised when the Manager is also the Trustee.

The legal owner of the Superannuation assets is the Trustee, the client is the ‘beneficial owner’ but the Trustee has total control and ownership of the fund and its assets. The Trustees duties are acting in the best interests of the client at all times and in all circumstances, this gives the Trustee enormous power to dictate outcomes with any money related client issue, bar none.

Fair to say Financial Advisers have limited input and no power once their clients enter this environment.

On the other hand, the RPM has total control of the platform operations unless there are legal agreements in place for Financial Advisers around access to clients, the platform and client communications.

The decision to ban 97% of the ‘innocent’ Interprac Advisers WAS NOT a Trustee decision it was the Managers Macquarie and Netwealth. This is evidenced by the fact that Super Trustees have no jurisdiction over non super monies in the IDPS and both managers banned all Advisers from their respective platforms in their entirety.

Having an Independent Trustee does not mean ‘special favours’, they are all strictly monitored by APRA and must act within the regulations.

The greatest threat to an Advisers relationship with their clients is the RPM Manager who can terminate client access and deal directly with an Advisers clients. This power is then significantly and arrogantly magnified if the RPM manager is the Trustee as well.

The advantages of the FPS White Label are:

• Lowest pricing for clients.
• Adviser Agreements with DASH for access to clients and the platform.
• A panel of Advisers dealing with DASH over client communications/management – coordinated by the AIOFP.
• Access to the Independent Trustee.

Please contact FPS CEO Arthur Naoumidis if you want further information.