Identify the complaints culprits urge industry funds

Industry superannuation funds organisation, the Australian Institute of Superannuation Trustees (AIST) wants the Australian Financial Complaints Authority (AFCA) to publish data revealing which financial services businesses get the most complaints, and why.

In a submission filed in response to an AFCA consultation paper on arrangements for comparative reporting of complaint data, the AIST has urged the inclusion of additional data which would reveal whether most complaints were lodged against bank-owned superannuation funds as opposed to industry or public sector funds.

Further, the AIST has urged a biennial review of such data.

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The AIST submission said that the public report needed to contain data which might assist in identifying which types of organisations created the need for greater regulatory, the success or otherwise of regulatory initiatives such as the product design and distribution obligations and trends and patterns of complaints which might highlight the need for reform.

The submission pointed out that while the AFCA was proposing only a simple business metric for each financial firm such as “very large” or “superannuation”, the AIST believed the authority needed to go further by specifying whether they were “industry funds, retail funds, public sector funds etc”.

It said that it believed that the simple metric being proposed by the AFCA would “not pain a truly accountable or fair picture”.

“It will not show – whatever the business size – the ‘intensity’ of the volume of complaints lodge against that business,” the submission said.

The AIST recommended that in similar fashion to the United Kingdom’s Financial Conduct Authority the public report provided AFCA should include the relative frequency of complaints by either the number of accounts held by the financial organisation or the number of superannuation members.

 




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Agreed but it needs to be weighted on a "complaint per 1000 members" basis and it would even better if they actually named the funds. Service quality and complaint handing is an important measure.

FOS already did publish data by provider on an annual basis. Was that not public?

Ok.... Industry Funds must also adopt real time reporting on the transfer of directors fees to trade union organisations and third party recipients.

Let's say all funds must be much more transparent about the fees charged to clients.

Agree that industry funds should disclose donations to other organisations.

Agree that banking and retail funds should disclose their donations to business groups and political parties. (Agent 86 - I know that these donations happen.)

Can you show the link for this please Bear. Re.
""FOS already did publish data by provider on an annual basis""

Hi Jon,

I had a look and you can log into the FOS/AFCA site and get it, though it seems you have to be a member. All licensees have access, so maybe ask them if they can provide it to you.

Agreed.
I also believe very strongly that no superannuation funds should be permitted to allow third party donations whether they be political or otherwise at any level.
If a director wishes to forgo their fee for their services to that fund, then they should aloow those fees to be retained for the benefit of the fund's membership, not be donated to a third party organisation or political party the member may not support at all.
Even if a superannuation fund wanted to make a charitable donation, they should require the approval of it's members to do so as any expenditure may effect the financial performance of that entity.
In addition, superannuation funds should not be permitted to commit member's monies to the sponsorship of sporting teams under the terminology of advertising.
Whilst trustees may well try to justify that increasing the numbers of members in their fund can assist in offsetting costs and lead to better negotiations in their favour, offering free tickets to members of their fund to watch rugby games only for the team the fund sponsors is simply ridiculous when considering the purpose of why the fund is there in the first place.
Whilst the member may think it is a bonus and reward, it is not fit for purpose.
The incentivisation of superannuation consolidation through the use of "carrots" such as frequent flyer points or gym memberships or similar should be prohibited. The consolidation of superannuation accounts can be a complex process and requires specific analysis in order not to disadvantage the member or their potential beneficiaries.
Slogans such as " Consolidate your Super NOW " is nothing more than seeking to influence behaviour for the purpose of increasing FUM.
Whilst consolidation can be entirely appropriate, offering non-related incentives to do so is negligent and irresponsible and should not satisfy the Sole Purpose Test or Best Interest Duty.
The commodification of superannuation funds has allowed them to develop into just another commercial product allowed to promote and manipulate "buyer" behaviour.
It would be appropriate for an adviser to be openly promoting a free holiday in Fiji , in return for a full financial plan delivered for $4000.
So, political donations of any type are designed to influence or to gain access.
There are only 2 reasons organisations or individuals commit huge sums of money.
With funds having a proportion of their members supporting a large diversity in political parties and groups, it is entirely inappropriate to commit members monies to the party of most influence or greatest access.

CORRECTION: Apologies.
"It WOULD NOT be appropriate for an adviser to be openly promoting..........."

Good points well made

Well said Agent 86. I would also like to see how many TPD claims are paid out as a percentage of successful claims to overall fund membership. It is when you are at your most vulnerable, you find out how good your Fund is.

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