ISA warns on defaults and ‘inappropriate advice’

ISA/productivity-commission/inappropriate-advice/industry-super-australia/superannuation-fund/

11 December 2018
| By Mike |
image
image
expand image

Industry Super Australia (ISA) has again differed with the Productivity Commission (PC) and has warned against people being defaulted into only one superannuation fund citing, amongst other things, the danger of “inappropriate advice”.

In a late submission filed with the PC, ISA said it did not support members being defaulted into one fund for life.

“The risk that disengaged and low-information members will be sold, nudged or defaulted into poor quality funds by their bank, their employer or through inappropriate advice is too great,” the submission said.

“To fulfil the collective social policy purpose of compulsory superannuation, it is appropriate for government to intervene strongly to ensure members are protected from such risks. We have previously explained how this can be achieved in the context of a strengthened industrial safety net,” it said.

The ISA noted in its submission that the PC had indicated that it was trying to get rid of unintended multiple accounts by having members, new job entrants default once and then auto-consolidating accounts thereafter.

It noted that the PC had also referred suggestions that members had one account that followed them through their life, with the member taking their balance with them and rolling it over with every next job.

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks 1 day ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

3 weeks ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 6 days ago

TOP PERFORMING FUNDS