While financial planning practices will come in for scrutiny in the Royal Commission into the Banking and Financial Services industries, industry superannuation funds appear to have been specifically singled out for attention.
The draft terms of reference outlined by the Treasurer, Scott Morrison include “the use by a financial services entity of superannuation members’ retirement savings for any purpose that does not meet community standards and expectations or is otherwise not in the best interest of members” – something which is seen as a direct hit at sporting sponsorships, advertising campaigns and transactions involving trade unions.
It is a term of reference which may cause some discomfort for the financial services regulators which, to date, have raised few qualms about whether some industry fund advertising and sporting sponsorships represent a breach of the sole purpose contained within the Superannuation Industry Supervision Act.
Financial planning organisations yesterday gave a qualified welcome to the calling of the Royal Commission, with the SMSF Association noting that the SMSF sector had actually been excluded from the inquiry.
SMSF Association chief executive, John Maroney said that while the sector had been excluded, it had already been the subject of significant scrutiny from the Cooper Review in 2010 and the Murray Inquiry in 2014.
The Association of Superannuation Funds of Australia expressed disappointment that superannuation had been included within the terms of reference, with its chief executive, Dr Martin Fahy claiming it had been subject to “a plethora of never ending inquiries, review and regulation”.
It said this was at odds with maintaining a system that was serving Australians tremendously well.
Association of Financial Advisers (AFA) chief executive, Phil Kewin said there clearly existed public pressure for the calling of a Royal Commission but it was to be hoped it did not erode the good work that had been done with respect to the financial planning industry.
“We have been subject to a lot of scrutiny and we have come a long way,” he said. “We would not like to see measures such as improved professionalism slowed or delayed.”
Comments
The Labour Party should have been more careful about what it wished for...
Walker must think the public are gullible, it’s the Banks who should be more careful about what they wished for!
The Industry superannuation funds donated a total of more than $4.8 million to associated entities of the Australian Labor Party in the 2015-2016 financial year.
Not one dollar was donated to the Liberal Party.
HOSTPLUS gave away $850,276 of members money to the ALP associated entity, United Voice, whilst CBUS donated a total of $628,829 and AustralianSuper $553,869 to various Labor associated entities.
According to an article produced by Emma Rapaport of the Financial Standard on 15th Feb, 2017, the total donations equate to approx 2.2% of all funds held by Industry superannuation funds at that time.
This is 2.2% of members monies donated to a political party.
If you are a member of an Industry Super Fund and you do not support, vote for or believe in the Labor Party philosophy, then your retirement monies are being used to financially support a party that you don't vote for!
(Is that in these member's best interest???.....I think not)
So, how do the Trustees of the super funds that did elect to make donations justify their own best interest duty to their members and how do they justify the decision to allocate monies that are deemed for retirement purposes and how do they explain that decision in light of their responsibility to enhance their member's retirement?
There were also some big Industry Super Funds that made decisions not to donate any monies to associated entities of the Australian Labor Party, but they may well have allocated member's monies to things like sponsorship of high profile sporting clubs or advertising ,again raising questions whether Trustees are acting in the best interest of their existing membership or simply building a brand. They will argue that by advertising it may attract greater numbers of members and this will lead to a reduction in overall costs per member based on volume etc, but do you really think that a reduction in an annual member fee from say $80.00 to $70.00 will in any way significantly enhance the end retirement benefit of a member?.....answer is no.
Game on ISA and we cant wait for head coach David Whiteley to reveal his amazingly clever explanation of why all this is simply ok....it wont be far away I am sure.
Right, so what you actually did is significantly misstate the financial standard article............
"According to an article produced by Emma Rapaport of the Financial Standard on 15th Feb, 2017, the total donations equate to approx 2.2% of all funds held by Industry superannuation funds at that time."
And now you are saying that it was actually this:
"Industry superannuation funds donated about 2.2% of all funds to political associated entities in the 2015-16 financial year"
So champ, my original point states YOUR comment required fact checking and the outcome of that fact check was.... that you were wrong. And yet instead of clarifying, you arrogantly brush past it to simply expand on your political rant, yet another fantastic endorsement for the professionalism of our industry.
And on the subject of donations, I agree, not exactly something that would sit right with many people, though ISF will may well spin this to suggest it was simply to combat the lobbying dollars spent by the rest of the wealth industry, which in turn results in "better" outcomes for members. Again, will be interesting to see how it plays out but in any case, lets stick to facts.
Still hiding champ?....fear of exposure ?
Your persistent game of lexical and logical semantics is if nothing else amusing.
When we have all got up off the floor laughing, then you can provide an in depth analysis of your explanation between
"about 2.2% of all funds" and "approx 2.2% of all funds", which will significantly alter the original basis of the argument that Industry Super Funds are ploughing member's retirement monies into Labor associated unions with no restriction or justification.
Oh....and while you are on that one champ, have a read of the latest Institute of Public Affairs report titled " Rivers of Gold" which has found that over a 3 year period, more than $18 million has been transferred from industry super funds to trade union organisations and then get back to us with a report.
"The total donations equate to approx 2.2% of all funds held by Industry superannuation funds at that time."
I think those numbers need a fact check champ, 2.2% of member balances? Are you telling me the cumulative balance of all those funds was ~$218m at the time? You know Australian super alone was a ~$100,000,000,000 fund right? Come on, lets apply some common sense and basic math hey.
Secondly, while its an interesting topic, I'm not sure that 'sole purpose' tests necessarily apply given these donations were no doubt paid out of the fees charged by the trustees and associated entities, not directly from member balances. In effect, it is likely no different under the law than the trustees of a retail funds using fees to cover lobbying and their own party donations (even if they are ultimately paid by the parent company)?
Again, interesting discussion from a political donations context but in the context of a broader wealth/banking industry inquiry, peanuts is an understatement.
No BB... "champ"........I think you need to fact check the 15th Feb, 2017 article produced by Emma Rapaport of the Financial Standard that I referred to, who stated... " Industry superannuation funds donated about 2.2% of all funds to political associated entities in the 2015-16 financial year", so I would suggest a call in to Emma to qualify the figures.
As per most of the Industry Super Funds, AustralianSuper also use the catch cry of " only run to benefit our members", so if you could explain BB " champ ", how giving the unions a total of $2,032,698 from AustralianSuper, HOSTPLUS and CBUS combined actually benefits members and their retirement accumulation, then I am all ears.
Oh, and another thing, what about you have the courage to put up your real name when you make a comment, rather than hiding behind a couple of fake initials.
For all I know you could be the "distinguished" Sam Dastyari having one last crack before heading off to his first lesson in Mandarin.
2.2%, 0.000022%, doesn't really matter what percentage it is IMO. Any dollar getting donated goes against the very stated philosophy of industry funds: "Industry SuperFunds are run only to benefit members" - From www.industrysuper.com. Perhaps a more accurate statement would be "Industry SuperFunds are run only to benefit members, and the Labor Party".
Employer and member contributions and investment growth is the funding mechanism and cash cow for these political donations to be able to be made.....don't try and dress it up any other way as Trustee or associated entity fees as it all comes from the same member's retirement account bucket. How giving away $4.8 million of member's money to the unions actually is quantifiable in real and dollar terms to benefit individual member's retirement savings seems to not be a priority when using other peoples money to galvanize the Industry Super Fund and Labor/Union alliance.
You would think best practice compliance would first require individual member agreement when approving fund monies to be utilized as political donations regardless of which political party or associated entity was beneficiary.
Good points BB.
Also the previous correspondent doesnt recognize the generally far better returns industry super funds have given their members !!
Have the " generally " far better returns been generated as a direct result of the industry super funds giving away millions and millions of dollars to the union movement??
It seems the comrades are gathering momentum and numbers in their defence!!....sort of like a union really!
Excellent contribution. You must be rolling in those Industry Fund shill-bucks! Keep up the good work!
Add new comment