ASFA chief draws a line

The chief executive of the Association of Superannuation Funds of Australia (ASFA), Pauline Vamos, has fired return shots in the firmly entrenched debate around the valuation of unlisted assets in certain superannuation funds, and any risk posed to investors as a result.

There has for some time been concern that super funds heavily exposed to unlisted assets will face significant losses when the time comes to re-price these assets.

But Vamos believes those voicing such concerns have now taken the matter too far, and that many super funds are being unfairly tarred with the same brush.

She said there has been significant misinformation circulating regarding the value and risk associated with illiquid assets held within superannuation funds.

“The industry as a whole, and I mean all stakeholders, should not engage in rumourtrage. This does not benefit the industry, its advisers, or indeed fund members,” Vamos said.

Vamos argued that many funds revalue illiquid assets on a regular basis.

“The market turmoil is having a different impact on different assets in the illiquid space and it is incorrect to treat them all the same,” Vamos said.

The ASFA chief executive also responded to the negativity from some parts of the industry to the relief provided to super fund trustees to provide ‘limited guidance’ to fund members during the current period of market volatility.

Vamos said some financial planning community members wrongly felt this would allow super funds to provide advice.

“There are some parts of the industry, including some financial planners and their advisers, that believe the relief provides trustees with the ability to provide financial product advice. What the relief is about is [enabling] trustees to provide greater guidance and not fall foul of ‘implied’ advice,” she said.

Vamos said even under the relief, super funds “can only provide guidance on a very limited range of scenarios”.