Mis-selling revelations prompt more Labor criticism

Instances of the mis-selling of superannuation products tabled in Canberra have fuelled further calls by Shadow Financial Services Minister Senator Nick Sherry for simplification of the super choice regime, including Statements of Advice that are no more than two to three pages long, and tougher regulation of exit and entry fees.

At a Senate Committee hearing the Australian Securities and Investments Commission (ASIC) deputy chair Jeremy Cooper tabled a report that highlighted several cases in which mis-selling of superannuation had occurred, only one of which had been identified as a result of a consumer complaint.

In one case, a couple with $6,110 in a fund were convinced to roll into a new fund and were charged a total of $1,157.52, or 19 per cent in exit and entry fees plus a $5,719 a year new insurance fee.

Senator Sherry said he was “deeply concerned” that consumers were unaware when they were being “ripped off”.

He said Labor would release its own policy position on superannuation, disclosure and adviser remuneration within the next 12 months.

Meanwhile, ASIC executive director, consumer protection, Greg Tanzer said at the Association of Superannuation Funds of Australia national conference in Melbourne that ASIC’s current shadow shopping survey was still underway, and its results would not be released until February 2006.