Profile: David Whiteley
By Lucinda Schmidt | smh.com.au | 05 November
David Whiteley
Photo: Eddie Jim
As the turmoil in investment markets around the world continues, David Whiteley's pet hate - commissions paid to financial advisers - is increasingly pertinent.
"In the midst of a global financial crisis, many people are seeking reassurance and impartial financial advice," says Whiteley, 38, the executive manager of Industry Super Network. "But if you see a [commission-paid] financial adviser, [he or she] will recommend a retail fund."
He would say that, of course. As spokesman for the umbrella body representing many of Australia's industry superannuation funds, part of his role is to spruik the advantages of the (usually cheaper) union-based industry funds over the retail funds.
In this new era of negative returns, the money sucked out of your nest egg in fees to the super fund (which may include ongoing commissions to the financial planner), can make a considerable difference.
"Have a good look at what you're paying," advises Whiteley. "If you're paying a commission and not receiving any financial advice, I'd be ringing the retail fund.
"Our perspective is that people are required compulsorily to contribute to super, so it's our job to make sure every dollar is well-spent. Minimising the cost of managing workers' super means we have an absolute opposition to commissions."
He also notes that industry funds have generally outperformed the retail funds in pure investment terms, mainly because their asset allocation has been more heavily weighted towards unlisted assets.
Recent research by SuperRatings found that industry super funds comprised nine of the top 10 performing funds for the five years to June 2008, eight of the top 10 over three years and seven of the top 10 over 12 months.
That's why Whiteley is so annoyed by the financial-planning industry. Although half the Australian workforce - about five million people - has super in industry funds, the amount invested is only $200billion of the $1.2trillion in total super assets.
"Despite the persistent net underperformance of the retail fund sector, financial advisers continue to recommend these products to their clients," he says.
"They don't typically recommend industry super funds because we do not pay sales incentives such as commissions."
Whiteley has been passionate about industry super since he joined the ACTU in 1999, when he was part of the team managing the union movement's superannuation strategy.
His upbringing, as the son of a union official and a teacher, meant that he was naturally oriented towards the labour movement. "People forget, or just don't know, that workers went on strike to get super," he says. "They think it's just another financial product but it's a fundamental part of our social policy.
That's the philosophical line in the sand between industry and retail funds."
Before that, the Yorkshire-born Whiteley had little to do with super, working in England for an insurance company before migrating to Australia in 1996 and spending two years in the oil industry as a marketer. When he arrived at the ACTU, he had a crash course in industry super - including consolidating his own piecemeal super investments into one super account.
Whiteley left the ACTU at the end of 2006 to run Industry Super Network, which is part of the Industry Fund Services group. He sees the role as a good platform to combine the values his parents instilled in him with the opportunity to improve people's retirement outcomes.
"Super is, in effect, deferred wages to allow people to have as dignified a retirement as possible," he says. "I see it as an absolute privilege, to look after people's retirement income."
The big questions
Biggest break
Joining the ACTU in 1999. It is a privilege to have a job that is not only interesting and challenging but aligned with your personal beliefs and values.
Biggest achievement
Having some semblance of a work-life balance. It is not easy and my family might disagree!
Biggest regret
Not sufficiently achieving a work-life balance!
Best investment
Consolidating a number of super accounts into one industry super fund, AustralianSuper.
Worst investment
Buying an eight-year-old Saab. It was a fantastic drive when it was not being repaired.
Attitude to money
A wise man should have money in his head but not in his heart (Jonathan Swift).
Personal philosophy
There's always more to be done ...
First published by Smh.com.au on November 05 2008
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