Vertical integration is off the radar for the time being but may come back if amendments to the Future of Financial Advice legislation are revived and reintroduced to parliament according to Industry Super Australia (ISA) chief executive David Whiteley.
He said while questions were building around vertical integration last year, ISA was not part of the group calling for its removal but did believe the planning sector needed diversity in who was providing financial advice, a situation which may come under review if FOFA amendments were raised again.
“We have all been working with the idea that the banks and their advice channels would be so brand proud and would have the best systems and the most trusted advisers that the events of 2014 have led to many people questioning those assumptions,” he said.
“If the FOFA amendments are passed through some time this year the issue of vertical integration may become active again, so in a way the bank owned groups may have dodged a bullet on this issue.”
Whiteley also called for FOFA to be allowed to work through the sector and said ISA and industry funds would not be looking for further changes in the sector.
“The Murray Inquiry has made a number of recommendations including leaving the FOFA regime for five years and not altering the default super system, as have a number of other reviews in the past five years, and they have all said Australia needs a default system as the majority of people are not choosing their own super fund.”
“The only people opposing that are bank owned super funds, which are also opposing the governance of industry super funds and if there is to be a further politicisation of super it will not be because of the industry funds sector.”