Trailing commissions and superannuation fund advertising were high on the agenda for the parliamentary inquiry into superannuation’s public hearing in Melbourne yesterday. And at least one group left the hearing uneasy about the committee’s intentions.
“I came away concerned by some of the line of questioning and the purpose of the inquiry”, industry fund bank Members Equity Bank executive manager Tony Beck said. Committee members took great exception to the industry fund promotion that the consumer is ‘substantially better off’ without commissions, Beck said.
In its written submission to the inquiry, Members Equity – the only bank to make a submission – called for trailing commission on superannuation to be scrapped. “The [9 per cent payment of income] is a statutory requirement – it compulsorily goes into a super fund. It beggars belief that the consumer should end up paying a sales commission on that contribution”, Beck said. “The financial planner doesn’t have to convince you to pay that.”
However Beck said the panel had missed a ‘myriad of issues’ as it was too focused on points raised by the FPA in its hearing the day before. ‘[The committee] spent a lot of time promoting the issues and constructs the FPA had put forward’, Beck said. “They were trying to justify the notion of trail commissions in particular.”
Super administrator Superpartners and industry body Australian Institute of Superannuation Trustees also said questions from the committee focused on the effect of commissions and the cost of advertising on super funds. Superpartners chief Frank Gullone said he drew a comparison for the panel of politicians between super fund advertising and political party marketing. “Saying a super fund can’t advertise and competitively position itself is like saying political parties can’t spend tax-payers money on publicity leading up to an election”, Gullone said.
Other super-related groups to appear before the committee, industry fund Equipsuper and super fund body Industry Funds Forum, could not be contacted before InvestorDaily went to press.
