The Federal Government’s legislated response to end grandfathered conflicted remuneration is disappointing, according to the Australian Institute of Superannuation Trustees (AIST).
The super body said the Government’s response, which followed the Royal Commission, had fallen short on consumer protection.
AIST chief executive, Eva Scheerlinck, said: “While the new law puts a stop to financial advisers charging fees-for-no-service, it does not remove the incentive for advisers to recommend that clients stay in existing, often poorly performing and expensive products”.
AIST said while it had welcomed the Government’s timeframe on how it would implement the Hayne Royal Commission recommendations its response had been “far too slow”, with only a handful of recommendations having been subject to the legislative process.
“The Government’s response so far has been tepid at best. It is crucial for restoring consumer trust in Australia’s financial system that key recommendations to address harmful conflicts of interest in the financial services sector are prioritised and implemented in a way that will improve outcomes for all Australians,” Scheerlinck said.
Scheerlinck called on the Government to prioritise recommendations to stop the worst practices among banks and other for-profit entities, including to ban the hawking of super products, such as the upselling of super along with the sale of bank products.
The super body also welcomed the Australian Securities and Investments Commission’s (ASIC’s) report that said the body would prioritise work on 13 matters referred to it by the Royal Commission.
Scheerlinck noted that Commissioner Hayne had not referred any profit-to-member super funds to investigation to the regulators.