Suncorp’s superannuation trustee head Maurizio Pinto fronted the royal commission for the second day in a row on Tuesday.
Under questioning from counsel assisting Michael Hodge QC, Mr Pinto said no one had ever raised with him any concerns about the effect that transitioning accrued default account (ADA) members to MySuper accounts would have on commissions.
However, Mr Hodge pulled up an email – a document included in Mr Pinto’s own witness statement – that was sent to advisers from Sean Cogman on 29 October 2013, then Suncorp superannuation and pensions business development manager.
“‘Grandfathered commissions will still be paid on insurance and funds under administration’,” Mr Hodge read from the email.
“But the second bullet point explains that for ‘MySuper and accrued default account members, no insurance or funds under administration commissions are paid on the MySuper account’.”
Pointing to another section of the email titled ‘Action Required’, Mr Hodge read: “‘We recommend that you call or write to your key MySuper customers and encourage them to make an investment decision.’”
Therefore a client would continue paying commission by making an investment decision that would see them remain as an ADA member, whereas those who made no such decision would avoid paying commission by virtue of being transitioned to MySuper, Mr Hodge confirmed with Mr Pinto.
“The only purpose of this email which you have exhibited seems to be to encourage an adviser to take steps that will maintain grandfathered commission?” Mr Hodge asked.
“No, I disagree,” Mr Pinto said. “I think it’s encouraging advisers to make contact with members so that they are actively engaged with their superannuation.”
“It’s recommending that the adviser encourage the member to make an investment decision,” Mr Pinto said, arguing that members “may well decide to be a MySuper member”.
Royal commission hearings on superannuation continue for the rest of the week. Stay up to date with the latest proceedings on our live blog: https://www.investordaily.com.au/superannuation/43410-royal-commission-superannuation-hearings
why have the regulators dealt with different providers in different ways. CBS gets many years to transition to mysuper? Hope the RC focusses on the lack of resources and capability of regulators.