Industry superannuation funds have broadly welcomed the final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and called for prompt regulatory action on the issued it has identified.
The Australian Institute of Superannuation Trustees (AIST) said regulators now had to act on the recommendations.
However, Association of Financial Advisers chief executive, Phil Kewin said that while the move on grandfathering had been expected, it was still something which would prove challenging.
As well, he said that while the Government had indicated that the Life Insurance Framework would be allowed to play-out there was reason to be concerned about the Royal Commission recommendation to reduce life/risk commission caps to zero.
Financial Planning Association (FPA) chief executive, Dante De Gori said the task for the financial planning industry was to look to how the recommendations were actually implemented and to work with the Government of the day to ensure they were implemented appropriately.
"This has ended a period of uncertainty and has provided an opportunity to review what is being recommended to see how it might work," he said.
AIST chief executive, Eva Scheerlinck pointed to what she said was Commissioner Hayne’s “emphasis throughout his final report on the need for retail super fund directors to abide by the best interests duty, which included a key recommendation for civil penalties to apply if this duty is breached”.
However, she warned that unless the regulators acted on the report’s recommendations, reformed their culture and more forcibly policed and enforced the law, nothing would change and members of retail super funds would remain at risk.
“What we saw in the Royal Commission, from the banks and other for-profit super funds, were examples of an absolute betrayal of their customers who trusted them with their superannuation,” she said. “Directors who ignore their duty to act in members’ best interests need credible deterrence to bad behaviour so civil penalties are long overdue.”
Industry Super Australia (ISA) said the Royal Commission had shone a welcome light on serious conflicts within the financial services system and validated the important role of industry and other profit-to-member super funds in safeguarding Australians.
The Association of Superannuation Funds of Australia (ASFA) said the superannuation policy reforms recommended by Commissioner Hayne would make Australia’s world class superannuation system even stronger.
ASFA chief executive, Dr Martin Fahy said that, in essence, the proposed reforms amounted to a strengthening of conflicts management and regulatory frameworks, that seek to ensure members’ best interests are at the heart of all trustee determinations.
“Reforming the system in this manner will build consumer trust and confidence in a system that is already delivering some exceptional outcomes for Australians,” he said. “The Commissioner has acknowledged that the regulatory architecture underpinning our system is strong and that the best interests covenant, and sole purpose test, set high standards for trustees operating superannuation funds.”