FWC expert panel transparency challenged
The Fair Work Commission's (FWC) expert panel has been challenged to give thorough reasoning for its default fund choices if the process goes ahead, with fears funds could be selected haphazardly given the looming deadline.
Indeed, the process as it currently stands could give priority to incumbent default funds and may not be scrupulous when it comes to analysing investment performance, according to Rafe Consulting director Barry Rafe.
Rafe conducted an analysis of the FWC's proposal to change the default fund structure under modern awards and found consumers would foot a bill of up to $400 million to transition to one of two to 15 default funds.
He told a panel discussion at the Financial Services Council's annual conference the process carries major risks, including anti-selection.
Addressing the same panel, Mallisons partner Nathan Hodge queried the expert panel's transparency requirements.
"Is the expert panel going to publish it's reasons?" He said.
Hodge expressed fears that funds that are not selected will be wiped out.
He noted that funds have the chance to reapply for selection four years later, but said most would likely not survive that long.
Recommended for you
Retail investment into private credit funds could surpass that of sophisticated investors, according to ASIC, but the regulator admits it is unsure how and where these individuals are first being introduced to the vehicles.
With the high cost of advice keeping young Australians locked out of advice, a fintech provider has said digital advice is key for licensees to capture this unadvised demographic.
ASIC chair Joe Longo has announced he will step down at the end of his term, departing the corporate regulator in May 2026.
When it comes to the phase-out of AT1 bonds, Schroders fixed income manager Helen Mason has urged financial advisers to sell up sooner rather than later or risk capital losses.
