Super regulation ‘inconsistent and confusing’
The “inconsistent” regulatory rules relating to the superannuation environment are impacting on the level of protection available to super fund members.
Russell Investments director of fiduciary research Scott Donald has called on super funds to go beyond the industry’s “sometimes inconsistent and confusing regulatory scheme” to ensure members’ interests are adequately protected.
Speaking at the Superannuation Researchers Colloquium at the University of New South Wales, Donald said that along with the growth of superannuation as a savings vehicle had arrived a “bewildering tapestry of laws, regulations and general law principles”.
Donald believes that superannuation laws contain “fundamental inconsistencies in the characterisation of members of superannuation funds as alternatively beneficiaries, employees, customers, investors, or even, given the important public policy elements of superannuation, as citizens”.
“In an ideal world, these rules would all emanate from a single, cohesive, and coherent set of assumptions,” Donald said.
“Regrettably, far from being an ideal world, these different characterisations implicitly reflect different assumptions about the level and type of protection that members deserve.”
Donald referred to the differences between the “protective, paternalistic rhetoric of ‘trust’, ‘trustee’ and ‘beneficiary’ and the individualistic, self-sufficiency of ‘product’ and ‘consumer’”.
According to Donald, these differences “fundamentally affect the types and levels of protections available to [super fund] members”.
“The ‘box-ticking’ compliance culture seen in the areas of risk management and disclosure in the industry, in particular, needs to be wound back in favour of a focus on what is material and an assessment of how that relates to the interests of members,” Donald said.
“Superannuation is too important to individual members, and to the economy as a whole, for the industry to forget this basic message.”
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.
