The superannuation industry appears split on the question of whether the funding of political advertising represents a breach of the sole purpose test.
A survey conducted by Money Management’s sister publication Super Review during the recent Association of Superannuation Funds of Australia (ASFA) conference has revealed a significant superannuation industry split on the question of what represents a breach of the sole purpose test, particularly where political advertising is concerned.
Asked to comment on suggestions to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry that advertising campaigns such as the so-called “fox in the henhouse” might represent political advertising, more than 40 per cent of respondents agreed.
The same respondents also agreed that the funding of such advertising by superannuation funds represented a breach of the sole purpose test.
However nearly 60 per cent of respondents said they believed that the advertising was neither political nor a breach of the sole purpose test.
What is more, around 70 per cent of respondents said they believed the sole purpose test should either be modified to give it more flexibility or abandoned altogether.
Asked what they believed the future of the sole purpose test should be, 28.5 per cent of respondents said it should remain as it is while 42.8 per cent said it should be modified to give it more flexibility while 28.5 per cent said it should be abandoned.
Industry backs sole purpose test changes
4 December 2018 5 Comments
Comments
Another reason to shut down default super and simply have choice super (like pre 1990).. All funds should be able to advertise and compete as they like and when they like, however membership (under age 40) should be voluntary, not compulsory.
So, what was the makeup of the attendees at the ASFA conference? Is there any vested interest at play in the survey results?
Spot on maybe do the survey with financial planners in FPA and AFA to get a better understanding who thinks is breaches sole purpose. Tthis issue only effects Industry funds still trying to keep guaranteed money coming from mandated Employment agreements.
ASFA is an ISA group so utterly conflicted (maybe that was your point, but pointing it out in case anyone didn't know that already).
These groups are worse than the white shoe brigade of conflicted salesmen that the instos like MLC AMP etc used to employ in the eighties who subsequently became directors. The only difference is these ISA ASFA types are a protected species by their pals in ASIC and the comical RC, and never need to worry about scrutiny or being professional or impartial decision making.
The Industry should back mandated investment Profiles classes and what they have to be called so their is no confusion for customers eg funds calling themselves balanced when really they are growth funds how can it be 26 years down the track from 1992 from compulsory super and such a simple detail be missed from the regulators. Rating companies and super funds would then be compared on a fair planning field for once
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