In circumstances where there will be no commissions attaching to MySuper and default superannuation products, industry superannuation funds should also ensure such funds are quarantined from unnecessary expenditures such as television advertising.
That is the assessment of Financial Planning Association chief executive Mark Rantall, who said the financial planning industry had addressed the question of commissions some time ago, and it was time for other sections of the financial services industry to get their own houses in order.
“Our industry addressed the question of trailing commissions and the earning of passive income some time ago as we progressively moved to a fee for service regime, but there is certainly scope for other sections of the financial services industry to be equally fastidious,” he said.
Rantall said in circumstances where it had been clearly stated that commissions should not apply with respect to MySuper and default superannuation funds, there should be equally strong rules utilised to quarantine member balances from unnecessary expenditures.
He said in circumstances where controversy had surrounded the amount of money expended by industry superannuation funds on television advertising, it followed that funds should be required to specifically quarantine MySuper and default fund balances from use for such purposes.
Rantall said with the objective of MySuper being to protect members’ interests via a low-cost default option, such protection needed to be extended beyond commissions and applied to the other activities which served to erode member balances.
