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IFSA attempts to reignite product rationalisation
The Investment and Financial Services Association (IFSA) has called for product rationalisation to be dealt with in the same context of a Treasury discussion paper dealing with an optional capital gains tax rollover for merging superannuation funds.
The Federal Government has moved to make consolidation within the superannuation industry easier, with Treasury having developed a proposal that would allow the rollover of capital gains tax losses in any merger between complying funds.
However, in welcoming the Treasury discussion paper, IFSA said the merger of superannuation funds highlighted the urgent need “to concurrently develop a streamlined process for the retirement of outdated superannuation, life insurance and managed investment products”.
IFSA’s deputy chief executive, John O’Shaughnessy, said often when funds or companies merge they find they have a suite of products with similar features and benefits.
“It makes sense to merge them for all concerned to minimise risk and capture efficiencies,” he said.
However, in releasing the Treasury discussion paper, the Minister for Superannuation and Corporate Law, Senator Nick Sherry, made clear it was confined to the capital gains tax issue, although Treasury issued a discussion paper on product rationalisation under the previous Howard Government and Senator Sherry last year said the Rudd Labor Government was working on a product rationalisation mechanism.
The Treasury discussion paper released this month states in the current financial climate it is important that potential barriers to a robust and efficient superannuation industry are minimised.
“Industry consolidation can assist by improving economies of scale and enabling the more efficient provision of services to members,” it said.
AUTHOR
Mike Taylor
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