Rice Warner has warned that the Coalition’s election doesn’t mean the superannuation industry will see a period of policy stability, despite the Morrison Government’s promise not to make any changes to superannuation in the upcoming Parliamentary term.
In addition to the industry still needing to deal with the Protecting Your Super reforms and the enhanced requirements of the Australian Prudential Regulation Authority’s (APRA’s) Member Outcomes regime, the Government is yet to implement most of the Banking Royal Commission’s recommendations. On top of that, there are still policy areas in need of reform.
Support for people approaching retirement, for example, needed immediate attention, Rice Warner believed: “Engagement and financial advice for these members is variable and sporadic. Many funds would struggle to pass a sound Member Outcomes test in this area.”
Despite super fund members needing guidance as they approach retirement, Rice Warner said the existing advice system was flawed despite multiple inquiries into the superannuation sector.
“The existing system is flawed with two major problems. The financial advice laws (reinforced by commentary from the Royal Commissioner) assume a financial adviser is independent only if they are not commercially linked to a product provider,” Rice Warner said. “However, members need strategic advice even if they are content to use the building blocks of their current fund (or product provider).”
The second problem identified by the company was the lack of a default produce for retirement, meaning all members entering retirement had to sign up for a new Choice option.
Rice Warner said that while the industry may not want change, the establishment of default retirement products and a simplified financial advice regime were needed regardless of who won Government, so it would be prudent to start preparing for reform now.
Comments
I wouldnt listen to anything RW says, its basically funded by the ISA
Just because you have some ideological difference with the origin of the comment, doesn't mean it's incorrect. Rejecting things automatically because you don't like who says them isn't very clever.
Argue against the suggestions if you will, that's called playing the ball, not the man.
Hey Geoff, you must not have read the reports that have been commissioned by the ISA before, do you work for them or something? They are a big company with a lot of rich people working there. Im sure my little comment wont hurt them. By the way, saying im not very clever is playing the man too.
First measure should be to totally remove the conflicted Union/Labor involvement out of all superannuation completely. If you need any simple evidence of how corrupted their system has become, look no further than the head of ISA, Mrs Shorten... seriously out of all the hugely qualified superannuation experts, business people/CEO's, SIS lawyers etc out there, she somehow manages to get that position when EffOffBilly was the Labor leader? Read the Rivers of Gold report, people, it is all discussed in depth in there. (BTW well done ScoMo!! First time I ever fist pumped an election result)
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