Industry Super Australia (ISA) has again differed with the Productivity Commission (PC) and has warned against people being defaulted into only one superannuation fund citing, amongst other things, the danger of “inappropriate advice”.
In a late submission filed with the PC, ISA said it did not support members being defaulted into one fund for life.
“The risk that disengaged and low-information members will be sold, nudged or defaulted into poor quality funds by their bank, their employer or through inappropriate advice is too great,” the submission said.
“To fulfil the collective social policy purpose of compulsory superannuation, it is appropriate for government to intervene strongly to ensure members are protected from such risks. We have previously explained how this can be achieved in the context of a strengthened industrial safety net,” it said.
The ISA noted in its submission that the PC had indicated that it was trying to get rid of unintended multiple accounts by having members, new job entrants default once and then auto-consolidating accounts thereafter.
It noted that the PC had also referred suggestions that members had one account that followed them through their life, with the member taking their balance with them and rolling it over with every next job.
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“The risk that disengaged and low-information members will be sold, nudged or defaulted into poor quality funds by their bank, their employer or through inappropriate advice is too great,” the submission said. Funny sounds like they are talking about MTAA sorry I mean Australian Super now.
We just want the clients to be mandated back into our Industry funds which we have been doing to customers all a long please sir can I have one more bowl of the rivers of gold of mandated money back to our industry funds with clients with no choice please oh please sir we are desperate we can't survive without our monopoly on the market. Without the forced mandated EBA agreements and breaking SIS laws paying for political advertising and paying for entertainment for employers with the super members money which we know we are not allowed to do and have admitted to doing for the sole purpose of political agenda which we have been proven to be misleading customers oh will someone please think of the highly paid executives how on earth will we live in a free market??
Industry fund financial planners only flog the in-house product!! How is this “appropriate” in light of the problems of vertical integration? I really do not understand how industry fund financial planners giving intra-fund advice can meet all of a client’s needs when the advice is so limited? This should be banned by the RC as soon as possible!!
Forexops, They only have one option to give advice or a very limited scope of options and they give clients warning about this in their SOA. This is the same way advisers within the bank used to work they only can give advice on one financial product, say a planner in bank they would have one Super option and about 4-5 insurance options and I have heard they used to give green planners one insurance company which means it is limited advice and they have not compared anything else making it easy for them until they become better planners then they open them to more choice. Bank planners normally run under head planners who over see plans of younger planners to make sure they are not missing things such as tax on TPD benefits through super, rollovers without checking notice of intents etc real basic stuff but unless you are experienced you just don't pick up everything when your new just like any job.
I think a good world I would see both both industry fund and retail planners exist along with Self employed planners or Choice Planners that have a large number or choice of super funds and insurance products to help solve problems for clients. Advisers do not sell products, just like GPs do not sell prescription medicine. A product may be recommended to achieve a strategic outcome.. Industry fund advisers they have families and are helping put clients into better position and are not bad people. However Intra-fund advice is no different to the old commission structures of investment companies before fee for service Its just crazy to call it anything but.
Something doesn't sit right for me to call an outright ban on commissions on investments but turn a blind eye to Intra-Fund advice which is the same thing but called something else. what sucks is planners have to complete an SOA or ROA to do simple advice all that costs money and is then passed onto the client yet industry funds can do all the same things for a client without any paperwork it just stinks of something not right
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