Financial planners are facing a total ban on trailing commissions attaching to superannuation advice under recommendations contained in the Productivity Commission’s final report on the competitiveness and efficiency of the superannuation industry.
The report, details of which have been released by the Treasurer, Josh Frydenberg, makes clear that fees attaching to superannuation be on the basis of cost-recovery.
The Treasurer’s selective release of the PC report has come at the same time as the Assistant Treasurer, Stuart Robert has sought to place pressure on the Federal Opposition to support the Government’s superannuation bills currently tied up in the Senate if and when Parliament resumes later this year.
Robert said that with industry superannuation funds set to overtake self-managed funds as the largest sector in Australian superannuation, Australians needed the Government’s so-called Protecting Your Super Package and Member Outcomes legislation passed more than ever.
With the PC’s final report backing many of the contents of the Government’s super bills, the minister appeared to be setting the stage for a campaign against Labor’s policy proposals, particularly its approach to franking credits and negative gearing.
At the core of the Government’s approach to the PC’s final report is the suggestion that workers will be better off if under-performing superannuation funds are weeded out of the industry, with people in their mid-50s standing to gain up to $79,000 extra in retirement.
Among the most radical proposals is for funds to be forced out of the industry if their investments options fall short of their benchmarks by more than half a per centage point over a rolling eight year period.
Frydenberg has said that the Government will wait until after the final report of the Royal Commission into Banking, Superannuation and Financial Services Industry before finalising its response to the PC.