Super funds rule out regulatory cross-subsidies

undefined/

23 April 2019
| By Mike |
image
image image
expand image

The major superannuation funds do not want the fees they pay under the so-called “APRA levy” to be used to cross-subsidise regulation of other sectors of the financial services industry.

The view of the funds has been made clear by the Association of Superannuation Funds of Australia (ASFA) which has used a submission to the Federal Treasury responding to the Australian Prudential Regulation Authority (APRA) capability review to argue strongly against regulatory cross-subsidisation.

The submission said the superannuation funds wanted to know what their fees were actually paying for and whether the money was being used appropriately.

“Transparency is particularly important given APRA collects an annual levy from trustees that involves full recovery of all supervisory costs incurred by APRA,” it said. “Funds raised from the APRA regulated superannuation sector should not cross-subsidise regulation of other sectors, providers or financial services.”

The submission argued that cross-subsidisation of other activities was not equitable and contributed to higher fees in superannuation without improving outcomes for fund members.

“The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry recommended a new oversight body be created to biennially assess the effectiveness of regulators and evaluate performance. For transparency, the report would be laid before the Houses of Parliament,” the ASFA submission said. “ASFA supports this recommendation in-principle.”

Elsewhere in its submission, ASFA argued for APRA and the Australian Securities and Investments Commission (ASIC) to emulate what they had done in the life insurance claims area by conducting a greater level of joint supervisory action.

It said that in such cases, publication of joint reports or guidance material would be particularly beneficial because it would provide clear messaging to industry participants and positive confirmation to all stakeholders.

 

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. ...

3 days 18 hours ago

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

1 week 6 days 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. ...

2 weeks 6 days ago

TOP PERFORMING FUNDS

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