The Australian Securities and Investments Commission (ASIC) intends to keep an eye on product manufacturers who try to pry away customers from underperforming superannuation funds into untested funds, although it did not explain how it will do so.
Only 76 funds were tested in the inaugural Your Future, Your Super performance test – a fraction of the total industry.
Speaking at the Australian Institute of Superannuation Trustees (AIST) Superannuation Investment Conference, ASIC was asked by the panel moderator: “What are ASIC going to be doing to ensure consumers aren’t convinced to move into a product that’s untested and poorer performing than the underperforming fund they may already be in?
“I’m concerned there’s potential for poor market behaviour and mis-selling and driving people from tested products into untested products and there’s going to be a fair chunk that will always remain untested.”
Jane Eccleston, ASIC senior executive leader for superannuation, said in response: “It is an issue that is a good one to talk about and some of the regulatory reforms are really helpful in this respect.
“Design and distribution obligations [and] anti-hawking laws [are coming] into force, and where the boundaries of providing general advice is.
“The extent of where you’re trying to influence people into a product – there’s some real limitations on that.
“All of those developments are quite helpful but it’s something we will be actively looking out for over the next while.”