Industry Super Australia (ISA) has used a damning report by the Australian Securities and Investments Commission (ASIC) on how large institutions oversee their advisers to warn against the big banks’ further spread into superannuation.
ISA referred to a report released on Friday, which highlighted the institutions’ failure to report breaches and non-compliance by advisers to ASIC in a timely manner.
The report said 26 financial advisers had been banned by ASIC under its Wealth Management Project, while over 1,300 customers had been compensated $30 million.
ISA chief executive, David Whiteley, said ASIC’s report cast a shadow over banks’ efforts to increase market share in compulsory super.
“The banks and their subsidiaries have a deeply entrenched sales culture that runs counter to consumer interests and is clearly incompatible with the public policy objectives of compulsory superannuation,” Whiteley said.
“The findings highlight persistent behavioural problems within the wealth management arms of the big banks. These findings warn against greater bank involvement in the compulsory superannuation savings of millions of Australians.”
ISA also noted that in October 2016, ASIC had reported that under the “fee for no service” scandal, over 27,000 bank customers had been compensated, with a further 175,000 estimated to come.