The chairman of the Australian Prudential Regulation Authority, Wayne Byers has pointed to too many superannuation funds taking a “minimalist, compliance-based approach” to dealing with conflicts of interest issues.
Addressing a Parliamentary Joint Committee late last week, Byers followed up on comments made by APRA member, Helen Rowell, to the Conference of Major Superannuation Funds (CMSF) where she directly referenced conflicts of interests issues raised at the industrial relations Royal Commission.
For his part, Byers pointed to APRA having reviewed management of conflicts of interest in the superannuation industry and had concluded that while there had been improvements across the industry and some trustees had established quite good practices, “others still have more work to do to meet the objectives of the prudential standard”.
“Unfortunately, we still see instances where actual and potential conflicts are viewed very narrowly: a minimalist, compliance-based approach is taken to the design of conflicts management frameworks, rather than an approach that seeks to meet the spirit and intent of the requirements,” he said.
Byers said some trustees also took a reactive approach to dealing with conflicts, rather than ensuring regular and appropriate prior consideration of conflicts and a proactive approach to their effective management.
The APRA chairman said the regulator’s supervisors were engaging with the entities that were covered by the review to ensure that appropriate and timely action was taken on any specific issues that were identified,” he said.
