In his concluding remarks at the end of last weeks’ public hearings on superannuation, Mr Hodge said the evidence heard by the royal commission during its fifth round of public hearings suggested some members were being exploited by their funds.
“Members of superannuation funds, like most beneficiaries, are vulnerable, and in respect of superannuation, many are disengaged and disadvantaged by a lack of financial literacy. They are readily able to be taken advantage of,” he said.
“And the evidence, you may conclude, commissioner, suggests that this has occurred in some cases. In most industries, the forces of competition can be relied upon to minimise improper conduct and effective regulation can be expected to address breaches of the law when breaches occur, however, for superannuation, the disengagement of members, amongst other things, may limit the effectiveness of competition.”
Mr Hodge said the hearings presented six questions for the commissioner to consider:
- Whether there are business structures that limit a trustee’s capacity to meet its fiduciary obligations;
- Whether these structures will require legislative intervention to protect members;
- Whether other relationships between funds and other parties cause conflicts;
- If laws regarding misconduct should be strengthened;
- What can be done to motivate regulators to act promptly; and
- Whether further “structural tweaks” need to be made to ensure clients’ best interests are met.
Counsel assisting’s full conclusion was not presented to the commission during the hearings, but will be submitted in written form by 5pm this Friday.
Michael Hodge pot calling kettle black? Of course lawyers don’t take advantage of their clients and lack of knowledge when it comes to legal matters, or for that matter, take percentage based commissions….ahh sorry “fees” from settlements, estates, property conveyencing etc….What has been lost here and completely overlooked by the media is that there are plenty of good advisers out there that do improve the financial literacy of their clients every day to enable them to assess both their adviser’s competence and their ability to assess whether their interests are being looked after by others
I wonder if the RC will look at those legal firms that prey on unsuspecting members wanting to help them with an insurance claim… for no fee of course!!
victim politics at its best…
I am looking forward to reading in the RC draft report that Mr Hayne and his assisting counsel recommend each AFSL involved in this fiasco be shut down by ASIC with no notice, no advice and just 28 days to offload every AR.
Let me guess ….
A lawyer is going to suggest that the regulator takes more legal action against super funds / advisers etc.
A we get lambasted for conflicts of interest.
Teach financial literacy in schools. Teach migrants the same. Make education practical. Develop co-operation between all parties for common goal of win/win. Our overall structure is not working and existing paradigms are limiting change for good. We have a backward system where rules are causing paralysis of action. Legislation is stifling growth. Legislation is regressive rather than progressive. Empowering everyone to make their own decisions and take responsibility at all levels brings about better outcomes than the nanny state we currently have. When interests are aligned and sufficient confidence in the information being provided is present, decisions can be made.
well said.. too much common sense for the over educated regulators thumping their chests!!
This is fncredible. That yes folks, as we suspect, there is a sales culture. Yes there is FOFA and Best Interest bu gosh…it is this questionable culture practised by banks and product manufacturers at the expense of the consumer. So tail wagging the dog for politicians and regulators to have a shot at the IFA when institutions have via their branches just taken wholesale advantage of unsuspecting consumers. This is regardless of being part of the retail chain or industry funds. I hope this report by the RC is released BEFORE an election is called. This way the public get to see how blatantly stupid our politicians and regulators have been and how no consumer can have confidence in dealing with a branch of a bank or an industry fund. This report needs to have teeth and we as IFA’s should demand action now. Not be the constant scapegoat for incompetance.