Senator Grant Chapman, chair of the parliamentary inquiry into the superannuation industry, has defended the need for industry investigation.
Speaking at the Association of Financial Advisers conference, Senator Chapman said despite all political parties unanimously agreeing to it, the action was assessed critically.
“I found it some what strange that when the inquiry commenced there was some criticism of it and there was some criticisms of the terms of reference as appearing to favour retail superannuation funds over industry funds. And indeed, some questioned the need for the inquiry at all,” Senator Chapman said.
It has been 13 years since the Superannuation Industry Supervision Act was introduced and given the industry changes proposed by the Federal Government a review was timely, he added.
“The findings of this inquiry and its recommendations will be based fairly and squarely on the evidence that is brought forward at our hearings and no other agenda”, Senator Chapman said. The inquiry received 89 submissions and more than 100 letters from financial planners. Hearings have been held in Sydney and Melbourne and will continue in state capital cities in February.
Senator Chapman identified key trends raised, but stressed he was not pre-judging or identifying what the final outcome of the inquiry and parliamentary recommendations might be.
Trends:
Strong move away from defined benefit funds to defined contribution or accumulation funds;
The complexity and cost of superannuation has increased;
A need for greater cost and fee transparency;
A need to re-examine the length and complexity of statements of advice;
The boundaries between information, general advice and personal advice remain uncertain despite clarification provided by ASIC;
The definition of financial product advice is too broad, restricting super find trustees from informing their members about superannuation in general and the features of their fund in particular.
