More regulation of financial planners needed
A global push to improve the regulation of financial planners including a ban on commissions and the requirement that all financial planners act in the best interests of their clients is needed, according to the Industry Super Network (ISN).
Speaking at the ACTU’s Superannuation Trustees Forum, David Whiteley from ISN, argued that the compulsory nature of super in Australia demanded a higher duty of care for government, regulators and industry and that a ban on commissions would yield substantial economic dividend, boosting individual and national savings.
According to a recent study by ISN’s economics unit, the opportunity cost of workers’ super savings being directed to underperforming retail super funds by financial planners paid by commissions, and away from better performing funds, is having a substantial effect on aggregate national savings.
The report found that over the last 12 years from July 1997 to 30 June 2008 inclusive, $50 billion in today’s money has been lost to national retirement savings in this way.
