AIST pushes for trust-based super system
A trust-based system is the best way to protect members and is the most cost-effective model to handle retirement savings, a superannuation body said.
In its submission to the Financial System Inquiry, the Australian Institute of Superannuation Trustees (AIST) argued high levels of consumer protection are a must for members of MySuper and choice super products.
"We've seen what can happen when financial advisors have scant regard for the best interests of consumers," AIST CEO Tom Garcia said.
"It's absolutely vital that in a compulsory superannuation system, all members of pooled superannuation funds receive the highest level of consumer protection through the trust structure."
The AIST also said there is a need for better disclosure and regulatory monitoring of related-party transactions in superannuation.
This would protect members from paying excessively for services due to vertical integration in the wealth management sector.
The AIST also advised against wholesale structural changes to super until the full effects of MySuper on fees are known.
"While it's legitimate for an inquiry to raise questions about superannuation — and we acknowledge there is always room for improvement — the Stronger Super reforms, which includes MySuper and SuperStream — must be afforded time to deliver on objectives," Garcia said.
AUTHOR
Malavika Santhebennur
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