Super fund changes expected to rebuild trust
PLANNED rules to eliminate financial planners' commissions and overhaul the way superannuation funds operate will help rebuild trust in the nation's $1 trillion-plus retirement savings industry, key players said yesterday.
PLANNED rules to eliminate financial planners' commissions and overhaul the way superannuation funds operate will help rebuild trust in the nation's $1 trillion-plus retirement savings industry, key players said yesterday.The head of National Australia Bank-backed MLC, Steve Tucker, said the landmark changes would end the battle between retail and industry funds, particularly in the fierce debate on fees."Whilst industry funds are a relevant and viable option for many Australians, their contribution to the super debate has, at times, been unhelpful and divisive and serves to undermine trust in a system which is largely operating well," he said."With the removal of commissions, and the introduction of a best-interest duty and two-year opt-in process, the campaign the industry funds have run against retail superannuation and financial advice can no longer exist."He suggested divisions within the industry had been leading to rapid growth in self-managed super funds.The Association of Superannuation Funds of Australia said changes would increase confidence in the industry. For consumers, this meant there was greater oversight of the provider and a greater focus on costs, commissions and after-tax returns, its chief executive, Pauline Vamos, said."These reforms protect the financial interests of those who are not engaged with their super, as well as respond to the overarching need for the industry to be set up to deal with the growing pool of retirees," she said.Damian Hill, head of REST Industry Super, one of the nation's biggest industry funds, said the changes would improve the infrastructure supporting the system. "This should ultimately lead to lower costs and better outcomes for members," he said.Detailed in the changes were plans to roll out MySuper, a low-cost default superannuation product.