Royal Commission issues early please explains

10 January 2018

At least some of the 17 industry superannuation funds responsible for financing the “compare the pair” and “fox in the henhouse” advertising campaigns have received correspondence seeking an explanation of their expenditures from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

Money Management has confirmed that the chief executives of at least some of the 17 industry funds have received correspondence from the Royal Commission querying not only their financing of the advertising campaign but also seeking an explanation of other expenditures they have made.

The receipt of the documentation is understood to have followed on from correspondence between the Royal Commission secretariat and the legal representatives of Industry Super Australia (ISA) which has coordinated the advertising campaign.

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Confirmation of the correspondence from the Royal Commission is consistent with the Government’s terms of reference released late last year which confirmed a focus on the degree to which superannuation fund expenditures were consistent with the sole purpose test.

It also comes as a survey undertaken by Money Management’s sister publication, Super Review, confirmed that while most superannuation fund executives and trustees supported the Royal Commission into banking and financial services, many did not believe it should also scrutinise superannuation funds.

The Royal Commission documentation is understood to seek significant detail from the superannuation funds, a number of which have now sought advice about how they should approach the handling of the issue.

Receipt of the documentation has surprised many in the superannuation industry because it has come so quickly after the Government’s publication of the terms of reference via the letters patent for the Royal Commission.

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Pity ASIC and APRA didn't do this rights from the start 10 years ago when the expensive propaganda first plagued our TV screens, may have saved members tens of millions by now (or of course, those millions likely would have been funneled to the Unions and Labor).

Pity you haven't learnt that boards of industry funds have directors from both the employer and employee sides of business. Maybe if retail funds had a few clients as board directors then they might do better performance wise and deliver more satisfaction to all clients.

Paraphrasing Shakespeare in reference to the Royal Commission inquiry into Industry Funds 'Hoist on their own petard'

Lets hope the please explain letters are also on route to the FSC and ASIC regarding how they corruptly and fictitiously made up the churn issue which created the LIF

Haha you’re funny. How are you so certain it’s made up? Because u and two colleagues say you don’t? Churning have made millionaires out of some advisers good enough to build and retain a decent size client base. This is not opinion, I’ve seen the numbers of 100s of advisers. Look, it was system created problem so pointing fingers at advisers is a cheap shot. Change the system. LIF helps that.

I've made a decent living out of putting a stake through the heart of legacy policies that unconscionable insurers refuse to upgrade or policies that are just 'bad'. Most on-line policies are crap. I'd like to see insurers taken to task for running good and bad policies in parallel universes; one that requires advice and the other only 'general'. I've had medical specialists compare definitions that come from the one source, but are worlds apart when it comes to quality and bugger all difference in price. If you'd like to examine a polished turn then look at 'accidental death' policies that you can find on line.

Try as they may, the retail funds haven't been able to shut down industry funds advertising. Will be of interest to see what the RC finds in this matter.

But the RC might also have a look at the marketing claims and behind-the-scenes of the retail funds.

Try as they may, the retail funds haven't been able to shut down industry funds advertising. Will be of interest to see what the RC finds in this matter.

But the RC might also have a look at the marketing claims and behind-the-scenes of the retail funds.

'Try as they may' is a bit rich. Retail has done bugger all to counter ISF B.S.

High fees (when compared to comparable countries) and their inability to outperform the index make it hard for Retail funds to have a good story. If they can't deliver above the index then they should drop their fees and come out looking better. Industry funds do better having more of less a single voice whereas the Retail offerings have hard time cooperating with their competitors.

Both industry and retail failed in their own way. Industry are reduce returns by spending millions on advertising that’s just not needed and over pay on wages. Retail ‘funds manager’ fees way to high. It is v expensive to administer a fund but fund manager fees are an extraordinary rip off. These haven’t reduced in 15 years and the can still charge 2% when they don’t beat index. This is where pressure should be.

They swiftly stopped comparing on fees now industry funds needs to disclose ICRs in greater detail. HostPlus is now above 1.5% p.a. fees for their default balanced option.

yes, RG 97 is starting to show up real fees

Ha Balanced option....Balanced option that has 90% Growth assets. Don't forget that industry funds don't report returns net of fixed dollar account keeping fees, they only net out the MER. Might not seem like a lot but $80 p.a. adds up for small account balances, and lets face it, the average balance of industry fund accounts is far lower than retail/wholesale.

Why would they jeopardise the fat mandates they get from Industry Super Funds? It takes a lot of planners to invest that much.

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