POWERED BY MOMENTUM MEDIA
Default funds and intrafund advice still on radar: Govt
The Federal Government is committed to opening the default super fund system to all players stating it would benefit all members and drive down fees, which have not fallen in line with expectations.
Addressing the inaugural Workplace Super Specialists Australia (WSSA) conference in Sydney yesterday, Frydenberg said the Government was "fully committed to increasing competition in the default superannuation market".
"I firmly believe in the benefits of competition and its power to put downward pressure on fees and increase quality of super products. MySuper is a strong step in right direction," he said.
Frydenberg said further competition was required with the Financial System Inquiry finding that superannuation fees have not fallen as much as expected given the increase in size and scale of the super sector.
"Between 2004 and 2013 super fees only fell by 20 basis points while size of average fund increased by twelve fold," he said
"We are committed to opening the market to competition which will require consideration of an alternative of the current poorly conceived Fair Work Commission process and selection of default funds in awards
"In considering what will be put in place the Government will ensure all MySuper products will be of highest quality, not just those under awards, and also ensure the wider regulatory framework is robust and appropriate to move to an open market."
He said this would include an examination of existing protections against funds or related parties offering inducements, or inappropriately influencing employers' choice of fund through threat of industrial disputation.
"We will put in place a framework with the strongest possible competitive forces, for the benefits of every member and see this as the most significant reform opportunity in superannuation."
Frydenberg also stated the Government would push to clarify the definition of intra-funds advice as the last part of the refinements to the Future of Financial Advice (FOFA) reforms that it was seeking.
He said the definition of intra-fund advice would covered under the Superannuation Industry Supervision (SIS) Act and would deal with any issues around conflicted remuneration as well.
"Once these refinements are fully legislated FOFA should be considered as settled and given time to work."
AUTHOR
Jason Spits
Jason has been writing on financial services since 1999 and has worked for on a number of trade media titles in both a full time and freelance capacity. He joined Money Management and Super Review in 2013 in the role of Senior Journalist.
Recommended for you
Governor Bullock took a more hawkish stance on Tuesday, raising concerns over Trump’s escalating tariffs, which sent economists in different directions with their predictions.
Equity Trustees has announced the appointment of Jocelyn Furlan to the Superannuation Limited (ETSL) and HTFS Nominees Pty Ltd (HTFS) boards, which have oversight of one of the companies’ fastest growing trustee services.
Following growing criticism of the superannuation industry’s influence on capital markets and its increasing exposure to private assets, as well as regulators’ concerns about potential risks to financial stability, ASFA has released new research pushing back on these narratives.
A US-based infrastructure specialist has welcomed the $93 billion fund as a cornerstone investor.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Global X GlobalX FANG+ ETF
33.51 3 y p.a(%)
2
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.62 3 y p.a(%)
4
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
5
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
