Speaking at the FSC Summit in Melbourne today, Mr Shipton let slip that the corporate regulator has intra-fund financial advice in its sights.
“We are also planning a project looking at personal advice provided by superannuation funds,” he said.
Mr Shipton said the new investigation will build on its existing work in the SMSF and superannuation sectors.
He also revealed that ASIC will be releasing a new report on insurance in super.
The royal commission’s next round of hearings will focus on superannuation, commencing Monday, 6 August.
Host Plus Balanced (My Super) Fund vs Vanguard Balanced Fund Asset Allocations
Description HostPlus SAA Vanguard SAA Variation
Australian Shares 25.00% 19.90% 5.90%
International Shares 28.00% 29.90% -1.90%
Property 13.00% 0.00% 13.00%
Australian Fixed Interest 1.00% 14.90% -13.90%
International Fixed Interest 1.00% 35.30% -34.30%
Cash 0.00% 0.00% 0.00%
****Alternative Assets**** 32.00% 0.00% 32.00%
He never specified ISA at all, and in fact there are a number of retail funds that they are likely to focus on first unfortunately. This is Shiption and ASICs chance tp prove that they are not as biased as all prior evidence shows, however I suspect that we all will be sadly disappointed, yet again.
ISA might be biased, IFA’s might be biased so perhaps ask customers who receive advice from superfunds what they think??, Im sure the vast majority (i.e most Australian’s) would agree that most (not all) funds provide a pretty valuable service.
ASIC won’t find anything in the industry funds. They will make sure of that. protecting their socialist mates. Why take the spotlight off the big bad adviser?
Could only happen while Labor are not in Government Well over due
Interesting, perhaps Australian Super will be the next Dover following the upcoming round of the royal commission commencing on 6 August
Wouldn’t it be great if ASIC started pounding industry super funds and holden them accountable and punishing their managers and advisers for the plethora of compliance breaches that the IFA’s have copped for the past 15 years.
Unfortunately, they will probably only look at the ISA funds that have “partnerships” with IFA’s to provide advice and belt them for not meeting BID (can’t recommend transfer away from ISA!) and again miss the “intra-fund advice”
Just look at the culture of these firms. The latest sales tactic being used by industry super funds are a tick a box that states “let’s consolidate your super” [u]on a binding death nomination form[/u]. Talk about up selling McDonalds style.
It’s amusing there was a major article in the Fin Review the other day banging on about the superior performance of Hostplus ‘Balanced’ portfolio. Drill down, and the asset allocation is close to 80/20. Of course the media conducts no due diligence.
Additionally, some of these industry funds invest in unlisted infrastructure trust. Guess who values the units in these trust? Good way to artificially inflate returns.
It’s actually an asset allocation of 98% / 2% which they have admitted themselves in AFR some time ago
While the review into the ISN is welcome , I do wonder what nasty surprises will be thrust upon us with the Life insurance in Super review. I have maintained for quite some time that the tax destructibility of Life premiums under super should have zero impact on the contributions cap, it makes a lot more sense and IMHO will result in a lot more improved advice around this aspect of risk and super. but then common sense approach has been somewhat absent so far in this wonderful RC world we live in .
Agree with you in relation to insurance, GPH. It’s ridiculous that successive inter-generational reports have repeatedly indicated a big problem with the social security spend looking after people who have become disabled and cannot work (or work at full capacity), plus the social utility drain and personal/family costs, which are immeasurable. And yet, governments of recent times have gradually chipped away at the sensible tax concessions to incentivise people to take more responsibility over their personal circumstances and plan for the worst. Really poor policy, kicking the can down the road…but hey, no surprises there!
In relation to the Industry Super funds, it’s about time the spot light was shone upon them. They have such a “holier than thou” attitude…we are for members, compare the pair and all that BS. Really? A couple of major points for the RC to check out, ASIC if they can be roused from their slumber, plus any of you journalists out there reading this:
1. Where are all the tax credits (ie franking credits) going? Sure, they say they report them back to members and reflect it in reduced fees. How much? What are the fee differentials? Not very transparent, is it? I have it on good authority that they capture 100s of millions of dollars in franking credits. They give some back to members, but millions go into funding their advertising/market campaigns, high wages and expense accounts for trustees & senior management. And let’s not forget their union masters, who have their collective snouts in that trough to the tune of millions and millions of dollars which pour into their coffers. What a great opaque arrangement.
2. What is the story with the inbuilt life insurance products? They are usually negotiated by the trustees. Generally cheap & inferior, with kickbacks going to the trustees. Appalling behaviour! I have many stories of members trying to claim against these rubbish policies and getting nowhere. And where are the trustees to help their members in their time of need? Either nowhere or worse obstructing members instead of helping them access their rightful benefits. The same benefits the trustees negotiated for their members in the first place! It’s disgraceful! And Industry Funds claim in all their expensive (member paid) advertising that they are there for their members…what rubbish they spout!
It’s usually advisers like us that take on the work helping these poor people as unpaid community service, Industry Funds nowhere to be seen. Let’s hope all this comes out.
Amazing and long overdue. Would the chair like a list of fund names and big acts of terrible advice- between all planners we could fill the session for months. Maybe ASIC is getting fair dinkum.
A good idea ,save a lot of work for ASIC . Lets have an ASIC dob in Line , I have only 2 pages ready to go .
About time. The real fee-for-no-service scandal lies with those funds who run intra-fund sales forces masquerading as advice teams, paid for by all members and used only by a few.
Anon you are so right – charging dead people for advice that was never provided that a community service. It’s like pro bono but without service and with a fee.