In the aftermath of a Royal Commission dominated by stories of very dubious selling practices, it’s unsurprising that Commissioner Kenneth Hayne has recommended that the hawking of superannuation products be completely banned.
“The law should be amended to make clear that contact with a person during which one kind of product is offered is unsolicited unless the person attended the meeting, made or received the telephone call, or initiated the contact for the express purpose of inquiring about, discussing or entering into negotiations in relation to the offer of that kind of product,” the Royal Commission final report said.
Hayne clarified however, that the recommendation meant that the unsolicited offer or sale of super should be prohibited other than to those who weren’t retail clients and except for offers made under an eligible employee share scheme.
This would mean that default funds could still be nominated, with Hayne acknowledging that many younger employees did not make informed decisions on their super funds.
Hayne also followed in the Productivity Commission’s steps in cracking down on default fund selection, recommending that people should only have one default account and that machinery should be developed to “staple” employees to a single default account to achieve this aim.
Hayne also confirmed that he agreed with the Productivity Commission that default super funds should only be created for new workers or those who didn’t already have a super account.
