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The Government should consider subsidising advice to superannuation fund members approaching retirement and have the system administered by Centrelink, according to the Australian Institute of Superannuation Trustees (AIST).
In a submission to the second phase of the Cooper Review into superannuation, the AIST has also called for the provision of a capped tax deduction for fees associated with financial advice, but argued advisers should be legally required to act in their clients’ best interests.
Elsewhere in its submission, the AIST has controversially called for the licensing of superannuation administrators and for the regulation and standardisation of information produced and published by rating agencies.
It said one of the biggest potential threats to the superannuation system was the collapse of a major administration company and, because of this, they should be licensed and have imposed on them a minimum capital requirement and standardised risk management criteria.
The AIST submission also called for the enhanced use of tax file numbers in relation to account matching, with AIST chief executive Fiona Reynolds saying it had the potential to be a ‘silver bullet’ in terms of lifting operational efficiency.
Reynolds said super funds were currently not able to use TFNs to verify and cross-match member data and it was not compulsory for members to supply their TFNs to their fund.
“It is absurd that in this day and age when you bank online and transmit all sorts of data across the globe in an instant that the back-offices of super funds are drowning in paper,” she said.
