PC models could increase risk of poor super products

The alternative superannuation default models proposed by the Productivity Commission could put consumers at further risk of being sold poor products by banks and other for-profit providers, Industry Super Australia (ISA) believes.

ISA’s chief executive, David Whiteley, said the models ignored the systemic underperformance of funds offered by for-profit providers and increased the ability to sell consumers poor products.

“The draft report does not address the cross-selling of for-profit funds, or the divided interests of bank-owned and for-profit funds to deliver both shareholder profits and member returns,” he said.

Related News:

“Strong protections are needed for consumers to limit the behaviour of these funds to ensure that member interests are the sole focus.”

Whiteley said a strong default system should protect disengaged workers who did not have the resources or expertise to make informed decisions on where best to place their retirement savings.




Related Content

Ten per cent of super members plan to swap fund

A survey of over 6,000 superannuation fund members has found that approximately 10 per cent of members intend to swap fund in the next 12 months, a re...more

Fintech may impact super value chain

The superannuation value chain may experience a wave of change wrought by the impacts of fintech, according to a recent Bravura Solutions report.The F...more

Super no longer a wealth transfer mechanism

The Federal Government appears to have substantially achieved its goal of limiting the degree to which superannuation can be used for wealth transfer,...more

Author

Comments

Add new comment