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

Insurance code needs teeth

Kim Shaw writes that in reforming the process on opt-out default life insurance, Financial Services Minister Kelly O’Dwyer has taken a practica...more

The regulators are stirring

Adam Gee writes that it seems clear that superannuation funds are now entering a new era of regulatory oversight.On 30 June, the Australian Securities...more

Valid approach to insurance in super

Specialist lawyer, John Berrill begs to differ with critics of the Insurance in Superannuation Working Group process, arguing it has the capacity to d...more



Add new comment