IFSA CEO hits out at report
The Investment and Financial Services Association chief executive Richard Gilbert has hit out at a discussion paper by the Australia Institute and the Industry Super Network investigating the effect of Super Choice on the industry and the need to encourage effective default super options.
“There is a contradiction here,” Gilbert said.
“They’re advertising that [Super] Choice has failed, they’re then saying that they want more choice, but the proposition they’ve put is actually going to limit choice.
“There is a fundamental contradiction [in this report].”
Gilbert said there was massive concentration in the default sector at the moment, and if the Australian Industrial Relations Commission (AIRC) moved to concentrate the sector, it would remove the corporate master trust sector, currently the cheapest sector, which would reverse the trend of dropping fees.
“Picking the default option, which is what the policy of the Government is, and which is what certain players are pushing to the AIRC, is only going to result in higher fees,” Gilbert said.
There will be less competition in the market from the move to encourage default super options, Gilbert said, and “the figures show” the corporate master trusts have had to reduce their fees to keep their business share.
“How can you have more choice if you limit choice? That’s the question,” Gilbert said.
“The alternative is to let the market do the job. And this report is about market interference.”
Recommended for you
ASIC has permanently banned a former Perth adviser after he made “materially misleading” statements to induce investors.
The Financial Services and Credit Panel has made a written order to a relevant provider after it gave advice regarding non-concessional contributions.
With wealth management M&A appetite only growing stronger, Business Health has outlined the major considerations for buyers and sellers to prevent unintended misalignment between the parties.
Industry body SIAA has said the falling number of financial advisers in Australia is a key issue impacting the attractiveness and investor participation of both public and private markets.
