Super funds press for roundtable regulatory cost cutting
The Government’s Economic Reform Roundtable has been confronted by the reality of what the regulatory settings are actually costing both superannuation funds and financial advisers.
While in the background of the roundtable Treasury is still grappling with the significant cost over-run of the Compensation Scheme of Last Resort, the major superannuation funds have pointed to a doubling of regulatory costs imposed on superannuation funds.
The Association of Superannuation Funds of Australia (ASFA) told the roundtable that in the past seven years, compliance and risks managements costs for funds regulated by the Australian Prudential Regulation Authority (APRA) have almost doubled from $550 million in 2017-18 to $1.05 billion in the 2024-25 financial year.
ASFA is one of the organisations specifically invited to the roundtable and said it will be arguing that targeted reforms to streamline the regulatory setting and cutting duplication will reduce compliance costs for superannuation funds “and allow a better and more productive allocation of resources”.
ASFA chief executive, Mary Delahunty said regulatory duplication and outdated rules are driving up costs and “putting a handbrake on what super can deliver in terms of productivity and investment returns to members”.
“Regulation is vital for trust, but when it overlaps or is outdated, it can become a drag on member returns and it impacts productivity,” Delahunty said. “The changes we are proposing are small, and importantly don’t water down member protections, but they could make a big difference for fund members and the country.”
“It will mean more funds for investible opportunities in the productive capacity of Australia, such as housing or clean energy, and that in turn helps economic growth, jobs and returns.”
ASFA outlined its reform priorities as including:
- Introducing a ‘tell us once’ reporting system across APRA, ASIC, ATO, ABS and RBA, eliminating the need to tell each regulator similar things in a different way
- Removing outdated non-digital disclosure requirements
- Improving coordination between regulators to cut policy overlap
- Streamlining contributions and retirement access rules
ASFA noted that Delahunty would be representing the superannuation sector at the roundtable alongside AustralianSuper chief executive, Paul Schroder.
They should also lobby for the repeal of fee consent forms, which has become a debacle that delivers no meaningful benefit for clients. The removal of this process would be a significant cost saving for super funds. This was a Hayne recommendation, however there is no evidence that it was needed or that it has had any impact other than to significantly increase the cost of providing financial advice and super funds maintaining this whole system.
No mention of the insanity of OFA’s ?
That’s odd.
Maybe they should stop being quasi advice auditors, to gatekeep advice fees agreed to by their own member and their adviser.
What’s needed is the complete seperation of the AFSL licence and product. How many Dixon Advisers and NextGen models do we need? Too many crooked & conflicted advisers blindly following an AFSL offering their inhouse MDA now and that needs to be stopped before it blows up.
Financial Advice could be implemented over 2 clients meetings and 60 minutes of a summary.
What we’ve got is a lack of professionalism at the Adviser level, corrupt politicians, an adversarial and dodgy regulator- the entire systems is broke.