Retail funds accused of ‘confusion marketing’

Many retail superannuation funds and those promoting self-managed superannuation funds (SMSFs) have undertaken “confusion marketing strategies”, according to Industry Super Australia (ISA).

In one of the last submissions filed with the Productivity Commission (PC) before it closed of its inquiry into the competitiveness and efficiency of the superannuation system, ISA defended the existing the default superannuation system and claimed that poor decision-making could not be solved by “simply nudging people into making choices and offering them more dashboards”.

It said suggestions contained in the PC’s draft report that better engagement could help connect employees to their superannuation was misplaced.

Related News:

“Disengagement is rooted in low financial literacy and cognitive limitations, further compounded by the complexity of the superannuation system, routine regulatory change and the ‘confusion marketing’ strategies of many retail funds and SMSF providers,” the ISA submission said. “As such, disengagement is rational.”

“Poor decision making cannot be solved by simply nudging people into making choices and offering them more dashboards. Any quantitative increase in engagement by such means will be superficial, reflecting the design of the system rather than any real increase in the capacity of employees to make better choices.

ISA reinforced its support for a “strengthened industrial safety net” with respect to default super entail a “quality filter” overseen by the Fair Work Commission.




Related Content

Share market strength positive for super funds

The ongoing rally in the share markets has treated superannuation funds well, with Chant West finding that the median growth fund gained 2.7 per cent ...Read more

Super funds pull through April strongly

Superannuation funds managed to deliver solid returns in April despite the softening economic outlook, with the slight market momentum experienced in ...Read more

Minimal super changes welcomed by Actuaries

The absence of any major changes to superannuation in the Federal Budget has been welcomed by the Australian Institute of Actuaries.At the same time a...Read more

Author

Comments

Comments

So obviously it is better to keep people ignorant then and have the 'parents' (the ISA funds) look after your super because most people are too stupid to learn. How about helping to educate the client rather than keep them in the dark. This doesn't mean that the clients will then structure their own portfolios but they then understand the rationale behind the adviser's recommendations.

So obviously it is better to keep people ignorant then and have the 'parents' (the ISA funds) look after your super because most people are too stupid to learn. How about helping to educate the client rather than keep them in the dark. This doesn't mean that the clients will then structure their own portfolios but they then understand the rationale behind the adviser's recommendations.

Hilarious hypocrisy yet again from these masters of deception. How long is ASIC going to allow this dangerous farce to continue?

Add new comment