12.1 Background

Both IOOF and ANZ have subsidiaries that are RSE licensees. These RSE licensees operate ‘platforms’ for members of their superannuation funds. These ‘platforms’ let members choose where to invest their superannuation funds from a menu provided by the RSE licensee. Some of the options on that menu are managed investment schemes. A company that runs a registered managed investment scheme is known as a ‘responsible entity’ (RE). When an RSE licensee includes a managed investment scheme on its platform’s menu, the RE may pay a fee to the RSE Licensee or an entity related to the RSE licensee.

Under the Future of Financial Advice (FoFA) reforms, ‘volume-based shelf-space fees’ are banned in most circumstances.[1] This is a fee paid by a fund manager (such as an RE) to a platform operator that is calculated on the basis of the number or value of the fund manager’s financial products included on the menu. Two exceptions to the ban are relevant. First, a reasonable fee for a service provided to the fund manager by the platform operator is not presumed to be a volume-based shelf-space fee. Second, volume-based shelf-space fees that existed before 1 July 2013 were grandfathered.

The Commission heard evidence from each of IOOF and ANZ about payments made by the REs of managed investment schemes to trustees within each of their respective groups. Mark Oliver, General Manager, Distribution, for IOOF Holdings gave evidence about IOOF. Mark Pankhurst, Head of Superannuation, Pensions and Investments for ANZ Wealth, gave evidence about ANZ.

[1] Corporations Act s 964A.