Labor details super switch policy proposal

Banning exit fees on super funds and restricting statements of advice to less than four pages will form part of Labor’s new financial services policy platform to be released within the year.

Speaking to Money Management this morning, Shadow Minister for Financial Services Nick Sherry said these proposals would be worked into the Financial Services Reform Act if Labor was to win the next election.

Sherry also labelled the Australian Securities and Investments Commission’s (ASIC) discussion paper on conflicts of interests released yesterday as “yet another damning overview”.

He claimed that there is a lack of effective consumer protection in the financial services industry and that disclosure is often insufficient.

“It is useless in many cases — unreadable disclosure documents of 50 -100 pages does not provide protection,” Sherry said.

“Simpler, standard, readable disclosure with tougher regulation on anti-competitive practices is required.”

These comments follow the release of ASIC’s hypothetical case studies, which suggest that accompanying internal controls are generally always needed to ensure that the quality of the underlining service is not compromised.

ASIC also recommended that advisers avoid being paid solely by commissions as a matter of best practice.

Sherry has repeatedly called for the abolishment of pure commission based selling of financial advice.