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FSC cautions Govt move to ‘default’ super products after poll

Yasmine Masi20 February 2024
Business man in suit pushing against walls closing in

The Australian Government’s move to introduce “standardised” and “default” superannuation products has been labelled “risky” by the Financial Services Council (FSC), after poll results indicated the public could be opposed to the proposal.

The survey, commissioned by the FSC and conducted by C|T Group of over 2,500 Australians, indicated 87 per cent trusted themselves more than the Government to decide what superannuation and retirement products to use.

This comes after Treasury released a Discussion Paper in December last year that suggested several ways to improve Australians’ superannuation outcomes in retirement phase, which included the proposal of defaulting people into certain retirement products and introducing a standardised product that superannuation funds would have to offer customers before any other products.

The poll results directly contradicted this, with 77 per cent of Australians aged 45 to 55 years old responding that they would prefer to have more control over where their retirement savings are put instead of using a standardised product. Close to 75 per cent of all respondents said they would prefer to choose or tailor their retirement portfolio instead of being forced into a default product.

“National polling shows the Treasurer should be careful not to default superannuation consumers into Government designed retirement products as Australians overwhelmingly support making their own financial decisions at retirement, with the support of affordable financial advice,” FSC chief executive, Blake Briggs, said.

“There is significant risk for the Government if they were to try and convince Australians that politicians know best determining which retirement products they should use.

“Consumers’ preference for control over their retirement savings is a cautionary warning to superannuation funds that are considering whether to impose ‘one-size-fits-all’ solutions onto members at retirement.

“Retirement is complex, and every family is unique, making affordable and accessible personal financial advice that tailors retirement outcomes for each household the key to delivering high quality retirement outcomes.”

The survey findings also indicated respondents had more trust in their super fund than the Government (73 per cent), despite 70 per cent trusting themselves over their super fund. Just over three-quarters of respondents (76 per cent) said they agree super funds should be able to provide members with “basic advice and guidance” about retirement products based on personal goals and experiences, while 62 per cent said they were likely to seek support from a financial adviser.

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