Measures to be introduced into MySuper will undermine the ambition of Bernie Ripoll, Chair of the Parliamentary Joint Committee on Corporations and Financial Services (the PJC), to improve consumer engagement with their retirement savings, according to the Corporate Super Specialist Alliance (CSSA).
Mr Ripoll was reported yesterday as saying he hoped the introduction of Future of Financial Advice (FoFA) legislation would lead to more people taking a greater interest in their retirement savings and investments.
Unfortunately, MySuper runs counter to that objective.
CSSA President, Douglas Latto, said under measures to be introduced via MySuper, corporate super specialists, who currently provide proactive financial education services to millions of employees via their corporate super funds in the workplace, will not be able to be effectively remunerated.
“If that happens, corporate super specialists will obviously have to withdraw their proactive financial services from the workplace,” he said. “What will that mean? It will mean more Australians will lose, rather than gain, interest in their retirement savings.”
CSSA advisers provide a range of services to employees, including:
- Conducting financial literacy and education seminars, personal on-site meetings and distributing newsletters in the work place
- Negotiating better terms and conditions with super funds
- Monitoring the super fund on a continuous basis, correcting the many errors that occur and overcoming administrative issues
- Playing a member advocacy role in negotiating lower fees
- Helping the fund with its group risk requirements; negotiating better features and lower life insurance premiums for members and helping members with life insurance claims.
“We believe it is highly unlikely that product providers in the space will adopt our proactive approach to financial literacy,” Mr Latto said, “which will ultimately compound the problem.”
A survey across CSSA membership reveals the current cost of providing financial services to corporate superannuation funds is about $1per member, per week.
Mr Latto said that research conducted by CoreData on behalf of the Association of Financial Advisers (AFA) earlier this year reveals that the services provided by CSSA advisers are very highly valued by the majority of employees.
“The research also confirmed our belief that if our services were not available, many employees would not actively seek out financial services education and advice,” he said. “It really doesn’t make sense to introduce measures which will remove consumer access to our services.”