ISA said in a statement that failure to consider super in the Sedgwick review will allow the banks to continue to cross-sell super in an attempt to get their hands on more workers’ super.
It noted concerns that poor outcomes for bank superannuation customers have the potential to undermine public trust in the super system as a whole.
ISA chief executive David Whiteley said banks must urgently address the cross-selling of compulsory super, and that the government must step in if they won’t.
“The banks appear blind to the social policy objectives of compulsory super, which logically should be subject to stronger protections than other financial products,” Mr Whiteley said.
“It is a tall order to ask staff to both meet sales targets and genuinely serve customer needs when the products they are required to sell are designed to generate revenue and therefore may not be the best on offer.”
Mr Whiteley said cross-selling of super products to banking customers through general advice should be subject to a “better-off” test to ensure consumers are not disadvantaged by the switch.
“A comprehensive ban on sales incentives for staff and a “better-off test” is now required to protect the public from the cross-selling of compulsory super by banks,” he said.
“The ‘for-profit’ culture enshrined in the banks business model raises questions of the appropriateness of banks involvement in compulsory superannuation, given super is a mandatory savings system central to Australia’s long-term economic and social prosperity.”
Consumers cannot purchase powerful pharmaceuticals based purely on advertising or the internet. They have to get a prescription from a professional who understands the products and the specific individual’s situation. The consequences of a non advised consumer getting it wrong are too great to allow consumers to purchase directly without professional advice.
Exactly the same principle should apply to life changing financial products such as superannuation, life insurance and disability insurance.
A brilliant and simple statement of common sense fact!
Thank you Anon.