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“Army of lobbyists” pushed Govs for light super regulation

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The Australian Institute of Superannuation Trustees (AIST) has accused successive governments of providing “dozens of regulatory carve-outs and concessions to products, benefitting banks and other retail super providers over more than a decade”, based in their latest research.
The report, authored by corporate governance expert, Professor Thomas Clarke, argued that regulatory carve-outs given to the retail super sector had resulted in “serious omissions and exemptions” that had impacted badly on members’ interests. AIST chief executive, Eva Scheerlinck, said that watering down consumer reforms “left [consumers] to fend for themselves”.
One government decision highlighted was a failure to improve disclosure and transparency in non-MySuper funds, with the AIST pointing to one decision not to extend best practice disclosure requirements for MySuper funds to other super products.
The report also pointed to legislative gaps in super reform that had led to a “systemic” lack of comparability of data in the super system. The AIST called on the Australian Prudential Regulation Authority (APRA) to publish comparative data to help consumers compare and choose super funds, and help regulators and stakeholder better understand the efficiency of the super system.
This is an issue that both Money Management and its sister publication, Super Review, are also campaigning to improve.
Clarke suggested that an “army of lobbyists” employed by financial institutions were responsible for governments going light on regulation.
“This panoply of self-interested exemption has arisen over time, incrementally and without any ostensible rationale other than to benefit providers,” he said. “The exemptions are systemic, on a vast scale, and have been occurring for decades.”




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A new book worth reading is called "The Myth of Capitalism" by Jonathan Tepper & Denise Hearn. The book provides numerous current day examples of where a market is squeezed, only to create a remaining monopoly player who then jacks up the fees on consumers. When you see how the Industry Super Funds resist competition, you can work out what their long game is. To drive their competitors out of the business, one way or another, so that they can eventually take their fund members to the cleaners. Then it will become apparent who the real Fox in the hen house really is.

The Myth of Capitalism tells the story of how America has gone from an open, competitive marketplace to an economy where a few very powerful companies dominate key industries that affect our daily lives. The industry super funds are not up there with the likes of Amazon, Google, etc. You have drawn a long bow.
Lets not forget that the retail funds have been lobbying away to reduce or extinguish not-for-profit funds for exactly the reason you suggest. It's good that there is competition within the broad superannuation industry - well for citizens.

All the retail super funds want is a level playing field. They do not lobby to exclude industry funds as you say - that's just nonsense - but that's clearly the industry funds' aim.

You are not correct in saying the retail funds were not lobbying to diminish industry funds. I was at meetings were they were. Dwyer, Corman, and Morrison were lobbied hard and in turn did their deeds on behalf of the retail industry.
I am not saying that they should not be able to lobby and seek to gain business advantages over competitors - this is business. The tenet of the book applies to retail funds as much as non-retail funds.
Some posters here seem to think that retail funds are above lobbying, back-stabbing and paying for advantage.

They were Lobbied because Industry funds were forcing peoples money into industry funds because of an EBA agreements without choice because of their occupation which isn't right end of story. They should have open choice to tell their employer where they want their retirement money to go which is what the government passed in 2012. ever since then compare the pair, fox and the hen house etc all advertising which has now been flagged as misleading. Compare the Pair Ads Misleading – ASIC 2014

Talk about a monopoly on the market make the members pay for union fees then pay the bosses from those unions money and put them on Super boards as a representative where they pay crazy amounts of money which they then funneled money into their prospective industry fund.

right now the industry funds are putting information out that they might be putting hold requests on property funds like funds did in 2009 but the industry fund call them defensive allocation guess they can go down in value funny that.

Enterprise bargaining negotiations were between employer and employee representatives and retail funds are not parties within the enterprise bargaining processes. Industry funds have both employer and employee representatives as directors/trustees and so can be understood to be an outcome of those relationships.

Fees are paid by retail fund clients and to adapt your line, these fees ended up as fat bonuses in the pockets of the senior executives of retail funds.

Wrong Hedware the difference is the client in retail funds have not forced clients to stay at a certain fund. Retail clients have always had choice to direct their super contributions to other funds. I'm a planner and have had clients in both types of funds, industry fund clients that didn't want their money directed into that fund had no choice their money or contributions have always been forced into that fund even if they didn't want that to happen. Adapt that into your story line clients in industry funds haven't had choice of a super fund for years and now they do they are leaving industry funds and the industry funds have repeated by warning about misleading ads all that misinformation that was used is also misleading with rating agencies not comparing investments on allocation of investments Growth and defensive but rather a name on the investor profile which the company names them self and their is no regulation on how they class these investments.

Advisers don't care which fund we use but both sides should be held to account on the same levels which are law. You cannot say that clients should not have choice to invest their money the way they want too and that we should not have an open free market to operate in for clients and companies.

You are a dirt bag if you don't think customers should not get choice. The government need to get serious about people saving for retirement do they want people to save for retirement and self fund or not? why did they reduce contribution limits? why is their a special tax for people with more than 1.6 million in super and why did they decide to change the tax rules on TTR pension turning the earning back onto this funds to get taxed at 15% when it was 0% which allowed clients to save more money into retirement.

At some point something will have to give... people will only sit down and take so much until they say enough is enough.

I largely agree with your line in giving choice to clients. I was just seeking to correct a misunderstanding over enterprise bargaining.

So if you were at that meeting, you finally admit that you're involved at some level directly with ISA, as we all have worked out long ago despite your denials.

No - never been at any meetings arranged by, with or for ISA et al. All meetings have been with the 'other side' which is the side that I have business interests. I want the 'other side' to be competitive, value driven and transparent to and for clients, and not charging rip-off fees.

Hedware it would be nice if the industry funds are held to the same standards for a start first hello Intra fund advice Charging everyone for financial advice even if they don't get advice. Sounds like Fee for no service...

Hedware it would be nice if the industry funds are held to the same standards for a start first hello Intra fund advice Charging everyone for financial advice even if they don't get advice. Sounds like Fee for no service...

Headware, the real issue is both the Retail and the Industry Fund both lobby. I, as a Financial Planner authorised via one of the 5 retails can use either an Industry Fund or a Retail fund. Why am I licensed the way I am - well, I thought that in the case I might make a big mistake, they are the backstop to compensate the client and this seems to be the way ASIC wanted it. I would prefer to be self licence much like any other profession but that one is really not what has been encouraged to this point.
If I work (employed) via an Industry Fund I would be able to recommend the Industry Fund I worked for and that is about it. I would want to keep my job and get trips to the Tennis etc so I would be good at it. What I object to is the fact that Industry Funds can rollover people into said Industry Fund under "inter-fund advice" knowing the regulator (ASIC) will not even look. I can also give much more advice with little compliance - all paid for by a small fee to all members and giving advice to those who ask only. If this is not commission I would love to hear how?
I myself am sick of being branded as "working my licencee". I use some of their administration platforms when it suites and a very wide range of investments from many, all unrelated. I rarely use an Industry Fund such as Host Plus's "Balanced" option because it is 98% growth and I have very (VERY) few clients who can tolerate that amount of investment risk. If the Industry Funds had transparent investments I would certainly consider but until then, I find it difficult to place someone else's money in something I would not use myself due to investment risk.
It seems all in positions of power have never looked at these issues and I note the Productivity Commissions report into super seems to have enforced Treasury's view when their submission to the RC stated that Financial Advisers place clients into under performing Super Funds. The tip here is do some research please and talk to some Advisers. All efforts of regulation in the last 20 years have done nothing but make advice more expensive and time consuming - yet the Industry Funds and Retail Funds have never had to discuss their own fees or investment strategies. History will in the end show very poor leadership from the powers that be - which you seem to be involved with.

I said "exclude" - you said "diminish" - different things entirely. Industry funds want the complete exclusion of retail funds - they've said as much. Their union heritage of bullying is on clear display and post the royal commission, they're working very hard to achieve this objective.

I want plenty of competition to derive value, generate good returns, etc and so not interested in restricting well managed funds from either side.

Hedware,please explain why unions are even involved with superannuation in the first place?

It appears there is only one purpose, and that is the clear stream of money that is lining their pockets and the labor parties 'donations' and political advertising. They are not pure white knights out to right the wrongs of an evil capitalist banking sector, no matter how hard you attempt to portray them in that light.

Thanks Steve. And for those who may not be aware, the AIST is just a lobbyist for union super funds.

Comrade Hed - no surprise your strident voice is yet heard screeching ISA's defense. How you sleep at night knowing they're as corrupt if not more so than any other big business, and yet continually defend them on here, is beyond me.

Just trying to point out that the retail funds lobby hard as well. Some commentators here seem to turn a blind eye to the lobby work by the retail funds or believe that the retail funds do not lobby. They do and that's a fact of life.

They also advertise - mostly directly to advisors. Their high fees mean they cant do comparison advertisements.

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