David Whiteley

In an unprecedented move for retail and industry superannuation, the Financial Services Council (FSC) and Industry Super Network (ISN) have today announced that they will work together on the critical issues for superannuation in Australia.

At the FSC’s Annual Conference in Brisbane today (Thursday) John Brogden, CEO of the Financial Services Council said: “The superannuation industry is now at the point of maturity where it must speak with a united voice.”

“ISN is here at our conference to symbolise a new relationship in superannuation policy in Australia.“

“On the eve of the election we are signalling to Canberra that the ISN and the FSC will work together on many key issues impacting fund members.”

“This is the start of a new era,” Mr Brogden said.” It is critical that we put our differences of the past aside and focus on building Australia’s next major export industry.”

“Because we have allowed ourselves to be divided, the significance of the industry and our prominence in the minds of government and consumers has been diminished. Ultimately, it is superannuation that suffer.”

“Superannuation funds are now worth $1.6 trillion. This is more than Australia’s gross domestic product and the capitalisation of the Australian Securities Exchange”.

David Whiteley, CEO of ISN said:

“A five year freeze by the super industry on advocating or supporting regulatory change – to emulate Treasurer Bowen’s proposal – will deliver to members certainty in the tax and regulatory settings.

“Industry Super Network and the Financial Services Council should lead the elevation of superannuation out of the political discourse and ensure policy making is considered, sector neutral and even handed.

“A clear message from our industry to the Australian public and policy makers that we have the future in our sights, and not the past, would be our lasting contribution to creating stability and certainty,” Mr Whiteley said.

Mr Brogden also said: “The full potential of Australia’s compulsory superannuation system can only be realised with a commitment to medium to long term policy settings that are sustainable, consistent with community expectations, and can attract bi-partisan support.”

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A collective fee is a fee paid by all members of a super fund so that they have access to a range of benefits.

CSSA President, Douglas Latto said that while on the one hand, the Government and ISN have expressed ‘strong principles’ around opt-in on the grounds that people should not have to pay for advice they may never receive, on the other they are campaigning for personal, individual financial advice, which some super fund members may never access, to be paid for via a collective fee.

“This is possibly the most patent demonstration of double standards we have seen to date in the FoFA debate,” Mr Latto said. “Personal financial advice is exactly that, highly personal. Why should all members of a super fund, subsidise the personal financial plans of a few?”

Mr Latto said the Government intends to make it possible for super fund members to access personal financial advice which will be paid for via a collective fee, by introducing an intra-fund advice fee into both MySuper and other corporate super funds (to be known as choice funds).

“Making the situation worse, the collective fee will not, as it is now in the corporate super environment, be tailored to suit the needs of individual employers and their employees but by the trustees of the fund, at a standard level for all members,” Mr Latto said. “The Government, in its paternalistic fashion, has again decided what is good for you: in their view, one size fits all.”

In servicing corporate super fund members, CSSA members currently negotiate a collective fee with individual employers. The fee is usually applied equitably to all members. In exchange, CSSA members provide a range of services to members, including:

• 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
• Conducting financial literacy and education seminars, personal on-site meetings and distributing newsletters in the work place.

“If a member of a corporate super fund wants personal financial advice, tailored to suit their individual needs, we believe he or she should pay for it,” Mr Latto said. “It is hard to see a better world for super fund members in any proposal that has them subsidising the personal financial plans of others and which legitimises the Government’s double standards and conflicted principles.”

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