The Superannuation Consumers’ Centre aims to make a positive contribution to restoring trust and confidence in the superannuation industry.
SCC works to improve the operation of the superannuation and retirement income system so that it delivers the best possible retirement income for Australian consumers.
SCC aims to do this in two key ways: input to Government policy and industry practice; and building a social media platform on superannuation assist, engage and empower consumers to act in their own interests.
Area of specific focus include, ensuring access to quality advice, identifying retirement risk zone issues, for example, the issues faced by consumers in the years either side of retirement, and highlighting the need for policy settings and products for in the retirement phase, in particular the need for good default products.
The centre is currently operating without funding and is only able to provide limited input to Government policy processes at this stage.
The Centre is a company limited by guarantee and Chaired by former CHOICE Chair Jenni Mack.
Background information about Superannuation Consumers’ Centre
In early 2012, the consumer organization CHOICE convened an establishment committee for a Superannuation Consumers’ Centre.
The committee included former Macquarie Bank CEO Allan Moss, Former Vanguard CEO and Financial Services Council Chairman Jeremy Duffield, and former ASX and ASIC Chairman Tony D’Aloisio amongst others.
In August 2012, the committee took a proposal to Government to provide a one off contribution to an investment fund to provide an endowment to fund the Centre for 20 years.
The Government agreed to make a $10 million contribution, provided the industry matched that contribution. While a number of major funds agreed to contribute, the committee did not raise the matching $10 million prior to the 2013 election.
The business case for the Superannuation Consumers’ Centre
Australia’s superannuation industry suffers from a lack of consumer trust.
This results in consumers not making the most of their superannuation savings opportunity.
Three interventions would assist this situation: advocacy, assistance and education. The Superannuation Consumers’ Centre aims to fill this gap by offering these three interventions to consumers.
Submission to Financial System inquiry
In a comprehensive submission to the Financial System Inquiry, the SCC argues a new philosophy of regulation based on the learnings of behavioural economics is needed.
The submission covers the need for a strong industry specific consumer protection framework and an expanded and more flexible toolkit for ASIC. It notes that the Financial Ombudsman has been an unparalled success arising from the Wallis Inquiry.
Complexity has become dangerous for stability of the system and is impeding competition. Although big data properly harnessed could be used to generate tools to assist consumers cut through bundling and pricing complexity.
The submission argues trust in super is lower than it should be; that it has forced all employees into investment markets and creates huge demand for financial advice. Hence there is a need to increase professionalism in the financial advice sector and that this will not be achieved until there is structural separation between product makers and financial advisors.
It argues for the development of a policy framework for the retirement phase of super, which includes a default option. There is a need to review the policy and regulator setting for SMSF given the size of the sector. Finally, there is a need to reframe the narrative of super away from wealth management and back toward retirement income.
Other recent submissions