Industry Super Australia has said that commentary from incoming ASIC chair James Shipton is evidence that the government’s proposed superannuation governance reforms are unwarranted.
Mr Shipton, who was named by the federal government as its choice for top post on Tuesday, has said the financial services sector needs to be reminded of some fiduciary basics.
“Financial institutions, big and small, are just stewards and guardians of other people’s money,” the former Harvard academic told News Corporation. “That is something that needs to be reinforced and reminded.”
In a statement reacting to the interview, ISA spokesperson Matt Linden said the “new ASIC chair is right” and that the mindset he alluded to has implications for the superannuation governance debate.
“Comments reported today from [Mr Shipton], saying the problem with the finance sector is that it has ‘forgotten’ who owns the money, should prompt the government to abandon its super fund governance changes,” the statement said.
Mr Linden used the opportunity to reiterate ISA’s position that the current model governing not-for-profit superannuation funds has superior consumer outcomes.
“The reasons for the superior culture and returns of not-for-profit funds lies in the representative trustee model,” he said. “Rather than abolish the representative trustee model from the law, the government should withdraw its flawed governance bill. If anything, it should introduce laws that require all superannuation funds to appoint representative trustees who know exactly whose money the institution is stewarding.”
Not-for-profit funds have outperformed bank-owned funds on average, Mr Linden said, adding that his members have also “avoided scandal”.
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