ISA warns on bank cultural contagion
Industry Super Australia (ISA) has warned that legislative changes to superannuation fund governance arrangements risks "importing finance sector norms" to industry fund boardrooms.
As well, the ISA has expressed alarm at the amount of power the legislation will deliver to the Australian Prudential Regulation Authority (APRA).
It has claimed the legislation "confers alarming and unprecedented powers and wide discretion on APRA to determine, administer and interpret the law".
It said that on these bases, it was urging the government to abandon the proposed reforms.
The submission said the approach adopted in the draft Bill "will not strengthen the governance of superannuation funds" adding "there is a real risk that importing finance sector norms to the boardroom will undermine the member-first culture that has been a hallmark of the equal representation model".
"ISA opposes the imposition of a new model of governance on the not-for-profit sector that has consistently outperformed its peers, while leaving largely unchanged the model that has underperformed and has been ineffective at preventing widespread misconduct," it said
"We strongly oppose the repeal of the legislative guarantee for member and employer voice in fund governance through the representative trustee structure. This will eradicate from the law books the most successful model of fund governance, in favour of a model that has failed to prevent the scandals and misconduct," the submission said.
It said these failings "have led regulators such as the Reserve Bank Governor and the Chairman of ASIC to warn of a loss of trust in banks".
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
