Retail funds accused of ‘confusion marketing’

retail-funds/super-funds/superannuation-funds/self-managed-superannuation-funds/SMSFs/ISA/industry-super-australia/productivity-commission/PC/superannuation-system/superannuation/financial-literacy/fair-work-commission/

8 January 2019
| By Mike |
image
image
expand image

Many retail superannuation funds and those promoting self-managed superannuation funds (SMSFs) have undertaken “confusion marketing strategies”, according to Industry Super Australia (ISA).

In one of the last submissions filed with the Productivity Commission (PC) before it closed of its inquiry into the competitiveness and efficiency of the superannuation system, ISA defended the existing the default superannuation system and claimed that poor decision-making could not be solved by “simply nudging people into making choices and offering them more dashboards”.

It said suggestions contained in the PC’s draft report that better engagement could help connect employees to their superannuation was misplaced.

“Disengagement is rooted in low financial literacy and cognitive limitations, further compounded by the complexity of the superannuation system, routine regulatory change and the ‘confusion marketing’ strategies of many retail funds and SMSF providers,” the ISA submission said. “As such, disengagement is rational.”

“Poor decision making cannot be solved by simply nudging people into making choices and offering them more dashboards. Any quantitative increase in engagement by such means will be superficial, reflecting the design of the system rather than any real increase in the capacity of employees to make better choices.

ISA reinforced its support for a “strengthened industrial safety net” with respect to default super entail a “quality filter” overseen by the Fair Work Commission.

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?...

1 month 3 weeks 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....

3 weeks 6 days 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...

2 weeks 5 days 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 4 days ago

TOP PERFORMING FUNDS