Banks incapable of acting in member’s best interests
“For profit” superannuation funds, particularly those owned by the banks, should not be eligible to be default funds, according to key industry fund covering the nursing and health sector, HESTA.
HESTA has used its submission to the Productivity Commission inquiry into superannuation industry competition and efficiency to argue for the exclusion of profit-driven superannuation funds because such an approach means then cannot be trusted to act in member’s best interests.
“HESTA believes that in a mature retirement system, businesses should not be able to profit from unengaged consumers and inert money, therefore profit seeking funds should be excluded from the safety net considerations,” the submission said.
“It is impossible to contemplate this important overarching criteria ever being met by profit-seeking funds in a mature system,” it said.
“HESTA recommends that the commission should strongly consider the appropriateness of these businesses being allowed to compete for the provision of a safety net fund at all and we believe the filter should reflect this.”
The industry funds submission claimed: “member’s best interest cannot truly be met by entities such as banks who seek to use inert money from unengaged consumers to build profits through their vertically integrated businesses”.
“Member’s best interest is the most important criteria to be considered when assessing the role of safety net fund providers,” the HESTA submission said. “Profit seeking funds have continually acted contrary to this objective.”
Recommended for you
With AMP advisers moving to Entireti and Insignia being the subject of a private equity bidding war, how can deals be navigated to ensure minimal stress and uncertainty for staff and advisers?
There are seven key mistakes that financial advice businesses need to steer clear of in 2025 to avoid hindering their business growth and profitability, according to Adviser Ratings.
The FAAA has secured CSLR-related documents under the FOI process, after an extended four-month wait, which show little analysis was done on how the scheme’s cost would affect financial advisers.
While advisers are increasingly eyeing private markets and alternative investments, two reports have underlined the lack of investor understanding that persists among both advisers and clients.
