Superannuation industry welcomes Sinodinos appointment
The industry was unsure on Monday when a minister for superannuation was not listed in Tony Abbott's ministry.
But returning the sector to Treasury is not new; Labor introduced the country's first superannuation minister, Nick Sherry, in 2007.
The Coalition's former spokesman for superannuation, Mathias Cormann, has been promoted to finance minister. As expected, Joe Hockey will be treasurer, Steven Ciobo will be parliamentary secretary to the Treasury and Arthur Sinodinos will serve as assistant treasurer.
Alex Dunnin, director of research at super research firm Rainmaker, said putting super into the hands of Senator Sinodinos was "probably a real stroke of luck for the sector as Sinodinos seems one of the most level-headed players in the whole cabinet, at least among the heavyweights".
He added that Senator Sinodinos might "also signal that the government doesn't really have much interest in more superannuation or financial services reform, or even fussing too much with rolling things back.
"The industry will welcome the appointment ... but I suggest the smarter players in the retail side of the trade will not be overly rapt, at least if they were expecting more restructuring."
John Brogden, chief executive of the Financial Services Council, said "as a former Treasury economist and chief of staff to John Howard, Arthur Sinodinos has unparalleled experienced for the role as assistant treasurer".
David Whiteley, head of the industry super lobbying group Industry Super Network, said Senator Sinodinos had "considerable experience in financial services".
The announcement comes as the corporate regulator said it was scrutinising the aggressive marketing of property to self-managed superannuation funds, which account for almost one-third of the enormous industry's total assets. "ASIC [Australian Securities and Investments Commission] is also experiencing an increase in reports of misconduct about aggressive marketing of investments, notably direct property, through SMSFs," it said in a consultation paper released on Monday.
And ASIC weighed into the debate over the minimum size for a fund, noting many industry participants question whether $200,000 is enough to establish a SMSF.
ASIC wants Australian financial services licensees to warn clients that SMSF investors are not entitled to compensation due to fraud or theft, after a parliamentary inquiry found SMSF investors in the collapsed Trio Capital were not aware they were ineligible or to other risks associated with SMSFs.
ASIC said financial planners and accountants should disclose the "potentially significant" costs associated with managing a SMSF.
Frequently Asked Questions about this Article…
Arthur Sinodinos will take responsibility for Australia's $1.6 trillion superannuation industry as assistant treasurer, although the separate minister for superannuation title was not included in Tony Abbott's ministry. The sector has been returned to Treasury, a move that some industry figures welcomed and others see as signalling limited appetite for big policy change.
Joe Hockey will serve as treasurer, Mathias Cormann has been promoted to finance minister, and Steven Ciobo will be parliamentary secretary to the Treasury. The article also notes that Labor once created a dedicated superannuation minister (Nick Sherry in 2007), but the Coalition has placed responsibility back with Treasury.
Reactions were generally positive about Sinodinos' experience. Alex Dunnin of Rainmaker called it a 'stroke of luck' and described Sinodinos as level-headed; John Brogden of the Financial Services Council highlighted his Treasury experience; and David Whiteley of Industry Super Network noted his 'considerable experience in financial services.'
ASIC said it is scrutinising aggressive marketing of property to SMSFs and has seen an increase in reports of misconduct related to direct property marketed through SMSFs. The regulator highlighted these concerns in a consultation paper and noted SMSFs account for almost one-third of the industry's total assets.
ASIC noted that many industry participants question whether $200,000 is enough to establish an SMSF. The consultation paper raised this issue as part of broader scrutiny of SMSF suitability and risks.
According to ASIC, SMSF investors are not entitled to compensation for fraud or theft. ASIC wants Australian financial services licensees to warn clients about this lack of compensation protection, a concern highlighted after a parliamentary inquiry into the collapsed Trio Capital.
ASIC said financial planners and accountants should disclose the 'potentially significant' costs of managing an SMSF and warn clients about risks, including the lack of compensation for fraud or theft and other eligibility or suitability issues flagged after the Trio Capital inquiry.
Industry commentary in the article suggests Sinodinos' appointment might indicate the government does not intend to push for major new superannuation or financial services reforms. Alex Dunnin suggested the government 'doesn't really have much interest' in further reform or reversing recent changes, and retail players expecting big restructuring may be disappointed.
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