The dangers of the YFYS policy

19 May 2022
| By Laura Dew |
image
image
expand image

Being in a good-performing superannuation fund may give members a “glow” but there will likely be unintended consequences from the Your Future, Your Super (YFYS) policy, according to the CFA Institute.

In a webinar discussing trust in financial services, Maria Wilton non-executive director at the CFA Institute said the YFYS performance test meant those members in a good fund felt more positive.

She said: “Your Future, Your Super has a bit of a glow, I think people think they are in a good fund, that is putting members’ interest first and that can make people feel good but at the same time, there are unintended consequences.

“My strong preference is for the industry to step up and regulate itself and then it’s likely we have a much clearer idea of what the unintended consequences will be.

“Some of the regulation we have seen, or talked about, over the last 12 months has been a solution in search of a problem and I think that’s unhelpful.”

She likened it to the Future of Financial Advice (FOFA) which brought in best interests duty and bans of conflicted forms of remuneration.

“Nearly 10 years with FOFA regulation, that was expressly put in place to improve trust and financial outcomes in the industry and really, it might have taken baby steps but it didn’t really achieve its end purpose.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

11 months ago
Kevin Gorman

Super director remuneration ...

11 months 1 week ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

11 months 1 week ago

Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Co...

1 day 18 hours ago

Demand from institutional investors was the main driver of growth in Australia’s responsible investment (RI) market in 2023, as the industry continued to gain momentum....

1 day 18 hours ago

In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges....

1 day 19 hours ago