Don’t blame and name us for others’ actions say super funds
Complaints lodged because of financial advice or insurance provided by superannuation funds should not necessarily be regarded as the responsibility of the superannuation funds themselves, according to a submission lodged with the Australian Securities and Investments Commission (ASIC).
Superannuation groups are seeking to avoid having their superannuation fund constituents wrongfully “outed” when ASIC makes complaints data public, including naming the financial services firms, insurers or superannuation funds involved.
The Association of Superannuation Funds of Australia (ASFA) has sought to use its submission responding to ASIC’s proposed new internal dispute resolution (IDR) data reporting requirements to argue that there is a danger that superannuation fund members may wrongly blame their superannuation fund for issues which might be the responsibility of external service providers.
“… while it is important to ensure that all complaints are captured, it is equally important to avoid duplication or double counting of complaints where different financial firms may be involved in the provision of services to a customer,” the ASFA submission said.
“For example, a consumer may make a complaint which — from their perspective — relates to their ‘superannuation’ however the subject matter of the complaint may in fact involve an external life insurance provider or financial adviser.”
It said that, for this reason, greater clarity was required in relation to how ASIC will treat such complaints when it publishes IDR data.
The ASFA submission particularly urged ASIC to be careful in the use of raw data, particularly with respect to superannuation-related complaints.
“Members of superannuation funds may make complaints to their fund trustee for a number of reasons. In a significant proportion of these cases, the decision or conduct of the superannuation trustee will not have been unfair or unreasonable but will have been dictated by regulation or by the governing rules of the fund,” it said.
“While many complainants are accepting of that explanation, many others will choose to exercise their legal right to purse external dispute resolution (EDR) — particularly given there is no cost to the consumer to make a complaint to AFCA.”
“Statistics reported by AFCA confirm that for a significant proportion of complaints made in relation to superannuation, the trustee’s decision is upheld. Consumer dissatisfaction with the decisions or conduct of a superannuation trustee is always regrettable, but it should not automatically be assumed to stem from some non-compliance by the trustee,” the ASFA submission said.
“An undue focus on the raw number of complaints made in relation to individual superannuation trustees may, in ASFA’s view, create a misleading impression of the performance of those trustees. It also risks potentially causing unwarranted reputational damage to those trustees and to the sector more broadly.”
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
