Industry funds urge comparability on member switching

AIST/mysuper/fees/industry-funds/regulation/policy/

9 October 2018
| By Mike |
image
image image
expand image

The fees, costs and performance reporting of retail superannuation funds should be aligned with those of MySuper funds to provide greater transparency when members are switched into poor performing, high cost super products, according to the Australian Institute of Superannuation Trustees (AIST).

Reflecting concerns about members receiving advice to switch funds, the industry funds body has told the Australian Prudential Regulation Authority (APRA) that such a move represents an “important baseline issue so that prudential standards may work more effectively”.

“Without such alignment, APRA cannot easily identify, for example:

• The poor value impact of conflicts of interest and other forms of misconduct on member retirement savings.

• Systemic switching of members into poor performing, high cost superannuation products.

• Whether investment performance is delivering fair value.”

Elsewhere in its submission to APRA, the AIST has pointed to issues raised before the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry around superannuation funds operating within vertically-integrated structures.

It said it believed prudential standards needed to aid meeting the members’ best interests test and noted the issues raised before the Royal Commission including:

• Conflicts arising from multiple directorships.

• Conflicts associated with related party arrangements.

• Conflicts arising from a responsiveness to shareholders as opposed to members of the superannuation fund.

• Conflicts arising from entities which are the trustees of an RSE as well as the RE of a managed investment scheme.

• How conduct which is deliberately not in members’ best interest is to be addressed.

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

The succession dilemma is more than just a matter of commitments.This isn’t simply about younger vs. older advisers. It’...

1 week 4 days ago

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

1 month ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

1 month 1 week ago

AMP has settled on two court proceedings: one class action which affected superannuation members and a second regarding insurer policies. ...

4 days 1 hour ago

ASIC has released the results of the latest adviser exam, with August’s pass mark improving on the sitting from a year ago. ...

2 weeks ago

The inquiry into the collapse of Dixon Advisory and broader wealth management companies by the Senate economics references committee will not be re-adopted. ...

3 weeks ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Powered by MOMENTUM MEDIA
moneymanagement logo