POWERED BY MOMENTUM MEDIA
Morrison’s election doesn’t guarantee super policy stability
Rice Warner has warned that the Coalition’s election doesn’t mean the superannuation industry will see a period of policy stability, despite the Morrison Government’s promise not to make any changes to superannuation in the upcoming Parliamentary term.
In addition to the industry still needing to deal with the Protecting Your Super reforms and the enhanced requirements of the Australian Prudential Regulation Authority’s (APRA’s) Member Outcomes regime, the Government is yet to implement most of the Banking Royal Commission’s recommendations. On top of that, there are still policy areas in need of reform.
Support for people approaching retirement, for example, needed immediate attention, Rice Warner believed: “Engagement and financial advice for these members is variable and sporadic. Many funds would struggle to pass a sound Member Outcomes test in this area.”
Despite super fund members needing guidance as they approach retirement, Rice Warner said the existing advice system was flawed despite multiple inquiries into the superannuation sector.
“The existing system is flawed with two major problems. The financial advice laws (reinforced by commentary from the Royal Commissioner) assume a financial adviser is independent only if they are not commercially linked to a product provider,” Rice Warner said. “However, members need strategic advice even if they are content to use the building blocks of their current fund (or product provider).”
The second problem identified by the company was the lack of a default produce for retirement, meaning all members entering retirement had to sign up for a new Choice option.
Rice Warner said that while the industry may not want change, the establishment of default retirement products and a simplified financial advice regime were needed regardless of who won Government, so it would be prudent to start preparing for reform now.
Recommended for you
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 Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
