AFA claims infringement of adviser rights
The Association of Financial Advisers (AFA) has claimed that tricky drafting of the legislation delivering MySuper has effectively infringed the property and income rights of advisers.
AFA chief executive Richard Klipin said it appeared the legislation had been purposely drafted to deprive advisers of the earnings they received from existing default option superannuation clients.
"This represents an acquisition of property rights on unjust terms, which would in other circumstances be contrary to the constitution," he said.
Klipin said the Government had failed to put forward an adequate case to justify what amounted to a huge exercise that would disadvantage many superannuation fund members.
Further, he said the recent report of the Parliamentary Joint Committee which had reviewed the legislation had chosen to discount the very serious consumer disadvantage.
Echoing concerns expressed by the Association of Superannuation Funds of Australia (ASFA), Klipin said the legislation suggested the Government was making assumptions around member disengagement and attempting to force all members who had not chosen an investment option, or chosen the default investment option, into a MySuper fund.
He claimed the mandatory transfer could result in members losing benefits they were not even aware of, particularly with respect to life insurance which might prove to be inferior under the MySuper arrangement.
Recommended for you
As the year draws to a close, a new report has explored the key trends and areas of focus for financial advisers over the last 12 months.
Assured Support explores five tips to help financial advisers embed compliance into the heart of their business, with 2025 set to see further regulatory change.
David Sipina has been sentenced to three years under an intensive correction order for his role in the unlicensed Courtenay House financial services.
As AFSLs endeavour to meet their breach reporting obligations, a legal expert has emphasised why robust documentation will prove fruitful, particularly in the face of potential regulatory investigations.
