APRA: Super industry over-reacts to warning
A senior Australian Prudential Regulation Authority (APRA) official has said the superannuation industry has over-reacted to a letter warning that recruitment advertising might breach the sole purpose test.
APRA's general manager, specialised institutions divisions, Stephen Glenfield told the Conference of Major Superannuation Funds (CMSF) in Hobart that he believed there had been an over-reaction to the regulator's letter.
Glenfield said that while advertising that was solely directed towards recruiting members in the new choice environment might be deemed to breach the sole purpose test, this would not necessarily be the case when the advertising fulfilled other, associated purposes.
He said those other associated purposes could include informing existing members of the benefits they were receiving or any new services that would be made available.
"Existing members of superannuation funds must get something for it to be justifiable under the sole purpose test," he said.
"And what we'd ask trustees to do is demonstrate what benefits existing members receive from such advertising."
Glenfield said he would have expected that trustees would have made an appropriate business case for approving such advertising.
"Because, ultimately, the trustees of a fund need to determine whether a campaign will benefit its members," he said.
Recommended for you
Infrastructure assets are well-positioned to hedge against global uncertainty and can enhance the diversification of traditional portfolios with their evergreen characteristics, an investment chief believes.
Volatility in US markets means currency is becoming a critical decision factor in Australian investors’ ETF selection this year.
Clime Investment Management is overhauling the selection process for its APLs, with managing director Michael Baragwanath describing the threat of a product failure affecting clients as “pure nightmare fuel”.
Global X will expand its ETF range of exchange-traded funds next month with a low-cost Australian equity product as it chases ambitions of becoming a top issuer of ETFs in Australia.
