Super funds the ultimate winners from QAR
ANALYSIS
The real surprise from the Government’s response to the Quality of Advice Review (QAR) would have been if it had not comprehensively backed increased financial advice delivery by superannuation funds.
In the days when the former Coalition Government was canvassing an “Affordable Advice Review” well before lawyer Michelle Levy was appointed to head up the QAR it was self-evident that superannuation funds were the obvious means of delivering low-cost advice with most already doing so via intra-fund advice.
Just as financial services product manufacturers once legally subsidised the delivery of financial advice via the payment of commissions to financial advisers and volume rebates to licensees, superannuation funds have a capacity to deliver “affordable” advice via recourse to a group funding pool.
And make no mistake, industry superannuation funds have been lobbying for this sort of outcome for more than a decade, canvassing both an extension of intra-fund advice and key revisions to the sole purpose test.
The QAR final recommendations picked up on those superannuation fund messages and the Government’s response has embraced the concept stating:
- The restrictions on collective charging will be amended to allow superannuation funds to provide more retirement advice and information to their members (accept in principle recommendation 6).
– This will work with industry to consider adopting, and tailoring as needed, recommendations 1-4, the remaining parts of recommendation 5, and recommendations 12.1 and 12.2 to implement recommendation 6.
- . Superannuation trustees will be provided with legal clarity around current practices for the payment of adviser service fees (accept in principle recommendation 7).
The degree to which the Government has embraced the increased role for superannuation funds was revealed in the comments of the Assistant Treasurer and Minister for Financial Services, Stephen Jones, in announcing the Government’s QAR response that the existing rules “constrain the very rules conversations that need to happen”.
“This advice gap is leading to worse outcomes for members. Superannuation funds have told me that they have many retirees who have not switched from the accumulation phase to a tax‑free pension account.”
“This might be good for the Treasury coffers, but it’s not good for members. I’m also told that there are thousands who miss out on the Age Pension and other benefits that they are entitled to, simply because they didn’t know who to ask. Or because they assumed their super fund was already doing this for them. We can do so much better,” Jones said..
“As such, we will adopt the review’s recommendation for superannuation funds to expand their provision of advice. We will also provide legal certainty for funds on how to collectively charge for advice.”
“Super funds are well‑suited to safely meeting the needs of their members. They are already governed by strong obligations to act in the best financial interests of members and act for the sole purpose of providing retirement benefits to members.”
So Industry Super Australia spends 20 years beating the crap out of Advisers and likening commissions to criminal theft.
– Now the same Industry Super supposedly loves Advice, as long as it is selling only it’s funds, via vertically owned, unqualified call centre jockeys.
– Now Industry Super loves Commissions, as long as they are HIDDEN, Non Disclosed & Member Consent is Not required, EVER !!!
– Now Industry Super loves to charge more & more HIDDEN COMMISSIONS to All members, knowing that most members get No Service.
HYPOCRISY OF THE HIGHEST ORDER ISA.
Nothing new, move right along.
They were always playing the long game. The weight of SG contributions was on their side.
Many people forget the ideological play here. Look at the backgrounds of those that make up the ISA member boards.
The biggest winners will be retail super funds. Union super funds have always provided conflicted sales and retention “advice” to members, and ASIC has turned a blind eye to it. Legalising it will allow retail funds to join the party.
I sent an authority to enquire into an industry super fund. Three weeks later it was still being processed, but in the interim, they’d managed to ring the client and offer their own inhouse financial planning service. The client said they were trying hard to “sell it” and “you must need advice because of that authority” Pretty confident seeing Super funds operate and promoting their fund only costs $1 week that Australians are in big trouble.
Name and shame please.
Is anyone suprised that the Union Based Funds are benefiting from this labour government. It was always their agenda to give the ISA free reign over the retirement savings of Australians. It’s so ironic to see this industry come full circle at the expense of many of its participants.
Now we will see the true corruption play out in this sector.
State of play for the ISA Monopolies (Going Full-circle):
The actions of the ISAs show that a government backed monopoly can to do a hit job on any of the largest organisations in Australia and come up smelling of roses after the destruction of many thousands of lives, businesses, and institutions. All you need is a government in your pocket, and a well-payed team of political campaigners as part of your business model. Anythings possible, as long as you have no qualms about destroying anything in your path, and a platform to take the moral high-groung once you have finished.
Ethics 101 would have ensured this never happened?
Dripping with sarcasm!